Good Morning All;
we’ll see a new weekly forex analysis.
UK: Growth still holding up post Brexit The latest Growth Domestic Product release showed that the UK economy grew by 0.5% during the three months to September 2016, confirming the preliminary estimate released at the end of last month, and confirming that growth held up better than most economic experts had expected in the immediate aftermath of the EU referendum.
GBP/USD started the week trading at 1.2350 before reaching the low point for the week later on Monday of 1.2320. After this GBP gained ground up to a high on Tuesday of 1.2506, before closing the trading week at 1.2480. This means the currency pair traded within a 1.51% range.
Eurozone: Economic activity shrugs off political uncertainty The latest Purchasing Managers’ Index surveys suggest that the political anxieties around Europe have not derailed the region’s gradual economic recovery. According to the preliminary estimate, the Eurozone’s Composite PMI (a broad based measure of private-sector activity) rose for a second consecutive month, climbing from 53.3 in October 2016 to 54.1 in November 2016. This month’s improvement reflected higher readings from both the services and the manufacturing sectors, where PMI’s rose to ten and eleven month highs respectively.
EUR/GBP started the week trading at 0.8576 before reaching a high later on Monday of 0.8631. After this EUR lost ground, hitting a low of 0.8470 on Wednesday, before closing the trading week at 0.8496. This means the currency traded within a 1.90% range.
United States: Could Trump affect the Federal Reserve? US president-elect Donald Trump looks set to steer the Federal Reserve onto a new course within the first quarter of his leadership. There are two open seats on the Board of Governors which remained mostly vacant during Obama’s tenure. Ralph Ferrara was appointed head of a team essentially to evaluate the central bank in order to make it more similar to the preferences of Trump. Given the terms of Janet Yellen and Stanley Fischer both end in 2018, there could be yet more scope to influence the structure of the Fed which is important because as well as being responsible for monetary policy, the Dodd Frank Wall Street regulation bill expanded its powers to include bank supervision.
EUR/USD started the week trading at 1.0591 before reaching the high point later on Tuesday of 1.0653. After this USD regained ground hitting the low on Thursday of 1.0530, before closing the trading week on Friday at 1.0602. This means the currency pair traded within a 1.17% range.
Japan: Struggle with deflation continues Japanese Consumer Price Index declined 0.4% in October 2016 on a year-on-year basis for the eighth consecutive month, highlighting the difficulty the Bank of Japan is facing in its battle against deflation and stagnant growth amongst a backdrop of fading policy options. As policymakers come under pressure to stimulate the economy, fiscal easing may be the preferred route as loose monetary policy has failed to propel the nation to the 2% inflation target.
USD/JPY started the week trading at 110.93 before reaching a low point later on Tuesday of 110.39. After this USD gained ground, hitting a high of 113.80 on Friday, before closing the trading week at 113.06. This means the currency traded within a 3.09% range.