Aussie and Kiwi Dollars top the leaderboard – 1st December 2015
The antipodean Aussie and Kiwi Dollars put in the best performance amongst the most commonly traded currencies yesterday with the Kiwi up by 0.8% against Sterling and the Aussie by half that amount. When we talk about a currency going up, in this case the Kiwi Dollar, the reality is that the GBP v NZD exchange rate has actually gone down. This is because the Kiwi has strengthened (i.e. gone up) against Sterling so that you get less Kiwi Dollars. If Sterling was to go up, the GBP v NZD exchange rate would go up and you would get more Kiwi Dollars for your Sterling. Still following…??
Yesterday the Japanese Yen was the weakest currency with the South African Rand, not far behind the US Dollar and the Euro. Sterling was fractionally ahead.
Monday’s economic statistics had minimal impact on the proceedings. Inflation was positive in Italy and Germany at 0.1% and 04% respectively. UK consumer credit and mortgage lending were only mildly disappointing. US pending home sales increased by less than expected.
The Australian Dollar strengthened slightly after the Reserve Bank of Australia kept its benchmark interest rate unchanged, having been helped earlier on by the strongest manufacturing sector purchasing managers’ index in two years. Both of the antipodeans were surprisingly resilient to a mixed clutch of Chinese PMIs, one of which, at 49.6, showed manufacturing in its wobbliest position in three years.
As usual on the first of the month, the topic du jour will be the manufacturing sector PMIs from Europe and North America. Swiss, Canadian and Australian gross domestic product will play supporting roles, as will German unemployment and the Global Dairy Trade index.
Analysts think UK manufacturing activity will turn out to have been a little more leisurely in November, taking the PMI down from 55.5 to 54.0, with steady or accelerating growth just about everywhere else. If so, Sterling might have to give back some of yesterday’s gains. Canadian GDP is forecast to have been flat in the third quarter, as it was in Switzerland. Growth of 0.7% is pencilled in for Australia in Q3.