Daily Brief

Daily Brief

See recent articles

Sterling in the dumps again

Five out of six

Whatever the effect of the Tory leadership hopefuls' debate on the Conservative party, it was of precious little help to the pound. Compared with Friday morning sterling is lower against the entire field, down by an average of 0.4% against the other ten most actively-traded currencies.

It would be wrong to suggest that the pound's descent was the result of the televised debate: it had spent the whole of Friday on the retreat. However, investors' attitudes towards sterling were not improved by the exchange, partly because the main protagonist - Boris Johnson - did not show up.  

All five of the participants insisted that Brexit must go ahead. Four were ready for Britain to leave the EU with no forward-looking arrangement in place and one said - or at least did not deny - that he would suspend parliament to ensure a "hard" no-deal Brexit. Only one conceded that the whole thing is a bit tricky and that a 31 October departure is unachievable. 

Krona's crown

Other than sterling's slide there was not a whole lot of movement on Friday. Among the upper-league currencies the Swedish krona took the honours after inflation came in higher than expected. The US dollar was half a cent ahead, level with the yen, while the euro and franc only narrowly beat sterling.

Friday's first ecostat, the Business NZ purchasing managers' index created waves for the Kiwi dollar. It was considerably weaker than expected, with employment and production contracting and new orders growing at their slowest rate since 2017. There is every sign that the NZ economy is running out of steam, perhaps even heading for recession.

Friday's euro zone data all came from Italy. Industrial sales and orders both fell in April and inflation slowed further to 0.8%. Across the pond US retail sales for May were close to forecast, rising by a monthly 0.5%, and industrial production increased by 0.4%. The provisional Michigan index of consumer sentiment "reversed the May gain, due to tariffs as well as slowing gains in employment".  

An upgrade but…

The British Chamber of Commerce has upgraded its growth forecast for 2019 from 1.2% to 1.3%. Sadly, there are downgrades for the following two years: 1.0% in 2020 and 1.2% for 2021.  

The BCC sees zero growth in the second quarter of this year, as producers run down the stockpiles built up ahead of the original Brexit date. Another UK ecostat released overnight was Rightmove's house price index, which tracks new listing by estate agents. It went up 0.3% in May and was unchanged from the same month last year.

A thin agenda today includes nothing from Europe. Canada and the States report on cross-border investment flows and the New York Fed prints its manufacturing index. Westpac's survey of NZ consumers comes out tonight, as does the Australian house price index and the RBA minutes.

GBP: Another wooden spoon

GBP: Another wooden spoon

SEK: A win for inflation

SEK: A win for inflation

USD: Consumer sentiment fades

USD: Consumer sentiment fades

NZD: A slowdown threatens

NZD: A slowdown threatens

EUR: Narrowly ahead of GBP

EUR: Narrowly ahead of GBP

Weekly roundup

Weekly roundup

Go to Weekly round up
Personal payments

Personal payments

With a personal account you can enjoy competitive exchange rates and low fees on all your payments.

Find out more
Foreign exchange business solutions

FX business solutions

We provide tailored services to help companies make global payments and manage their foreign exchange risk.

Find out more
Travel money

Travel money

Order your travel money for branch collection or secure it on our explorer multi-currency Mastercard®.

Find out more