Blog

#AUD and #NZD fall against #GBP as Chinese uncertainty continues – 7th September 2015

Efforts by Chinese authorities today to prop up the Shanghai stock market this morning were not of much help to the commodity currencies with the NZ Dollar worst-hit, down by nearly three cents – 1.2% – while the Aussie Dollar is down by a cent against Sterling.
Some of those declines was the result of ongoing uncertainty about China and some of it was related to Friday’s US employment report, which showed non-farm payrolls increasing by 173,000 in August which was well short of the expected 218,000 increase.
The data put investors in a quandary. Should they buy the US Dollar because, overall, payrolls were in line with expectations? Should they sell it because jobs growth did, after all, slow in August? So they did both before deciding, in the end, that buying the US Dollar was the right course of action meaning the US Dollar was the day’s best performer.
The US and Canadian Labor Day holidays mean no North American data today and no New York market this afternoon. There are vanishingly few ecostats from anywhere else either.
Earlier this morning Germany reported a 0.7% monthly rebound in industrial production. Switzerland revealed a further increase in its currency reserves (as the result of intervention to depress the franc). Yet to come are Norwegian manufacturing output and Euroland investors confidence. Oh, the excitement.
With nothing else to think about, investors might care to reflect on the opinion poll published over the weekend. In response to the question “Should Britain remain in the EU or leave the EU?” 51% wanted to leave while 49% preferred to remain (intriguingly, there were no don’t-knows). The result will not be comforting to Sterling’s supporters.