Daily Brief

Daily Brief

Login Visit News Hub

Sterling's fight-back continues

To vote? On what to vote?

Sterling pulled it off again on Tuesday, holding onto its lead for a second day following Friday's immolation. As on Monday it was not an overwhelming victory: the pound added another 0.4% on average. But it was confirmation that investors do not see Britain's post-Salzburg situation in a wholly bad light.

The Brexit downside for sterling is still that, as of Thursday, the UK government has no withdrawal plan that Brussels can accept. Bruno Le Maire, France's finance minister, drove home that point when he said that Britain must not be better off outside the EU than in it.   

However, parliament seems increasingly unlikely to give the prime minister a blank cheque to commit the country to whatever exit deal best suits the Conservative party. Delegates to the Labour party conference agreed yesterday to vote against any deal she brings back (they are, after all, the Opposition party). A comment from the podium that "No one is ruling out [a second referendum with] Remain as an option" drew loud support. 

Draghi dilution

When Peter Praet, the European Central Bank's chief economist, responded to a question from reporters he poured cold water on the notion that the ECB president had conveyed any new and meaningful message with his observation the previous day. The euro took a step back.

Mr Praet said it was right that the euro had subsided after investors had had time to absorb Sig. Draghi's comment on Monday because "I don’t think there was anything new in his communication". The euro subsided again after Mr Praet's remark was reported. It lost a net two fifths of a cent to sterling, as did the Swiss franc.  

The US dollar spent Tuesday trying, and failing, to get excited about the Federal Reserve rate hike that will almost certainly be delivered this evening. A tub-thumping America-first speech by the US president to the United Nations General Assembly was cause more for mirth than for dollar action.  

The Fed and the RBNZ

This evening and tonight two central banks will reveal their latest policy decisions. America's Federal Reserve is widely expected to take its Funds Rate 25 basis points higher; the RBNZ is likely to make no change to its 1.75% Official Cash Rate.  

The US economy is strong, unemployment is low, inflation is above target and equity prices are close to record highs: it is hard to imagine the Fed not making a move today. The more important aspect of the announcement will be how the Federal Open Market Committee sees the economic and rate situation developing in 2019.

New Zealand's economy expanded by just as much as the States in the second quarter and data released overnight showed a welcome rebound in business confidence. The Kiwi reacted positively to the confidence figures, though investors see little chance of the RBNZ taking rates higher. The most they can hope for is a less pessimistic growth outlook in the central bank's statement.

GBP wins small but wins again

GBP wins small but wins again

EUR constrained by chief economist's comment

EUR constrained by chief economist's comment

USD awaits Fed rate hike and outlook

USD awaits Fed rate hike and outlook

NZD expects no central bank move tonight

NZD expects no central bank move tonight

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