Currency Note

Who would have thought!

By Callum Holmes November 9th, 2016

Trump has been voted in as the new President of the USA. Clearly 2016 is the year for political surprises. As yet the effect on currencies has been less than expected, unlike the stock markets which have plunged, but this may well change as the day and the week progresses .

The key point is that in times like these, it’s crucial that you minimise risk and losses on your international payments. Contact us as soon as possible to find out how.

UK Manufacturing buoyant benefiting from sterling weakness

As the market waited with baited breath for the US to finally go to the polls, the UK’s manufacturing figures were released. In line with the weaker sterling we saw manufacturing continue to pick up as overseas orders continued their steady flow backed by highly competitive export prices. Output from manufacturers rose by 0.6% last month, up from 0.2% in August with a big increase from pharmaceuticals.
Looking to the day ahead, the spill over effect of the latest surprise election result will continue to filter through to the market, resulting  in increased volatility.

In terms of UK data, we have the goods trade balance due today, while Monetary Policy Committee (MPC) Member Haldane is due to speak at the book launch for ‘How the World REALLY Works: Savings, Investments, & Pensions’. If he was to drop any subtle clues with regards to Bank of England (BoE) policy, sterling could move as a result. His book is quite apt given that the UK Chancellor’s Autumn Statement” is due on 23rd November.

Eurozone watching the US

Yesterday saw a splattering of data releases from the Eurozone. Germany saw both its trade balance and industrial production come out worse than expected. The bloc also saw a Belgian bond sale, Irish consumer confidence data and an EU Finance meeting.
After months of what turned out to be a bitter US Presidential Election campaign, Trump triumphed over Clinton which benefited the euro as US markets fell.
Today sees only a German bond auction of note from the Eurozone. The aftermath US election is likely to drive the markets for the rest of the week, with markets recalibrating the risks associated with a Trump presidency.

US Elections move dollar

The US dollar was flat as the markets awaiting the outcome of the US Election. A victory for Hillary Clinton was seen as a vote for the status quo and the least disruptive outcome for the financial market. A victory for Donald Trump was seen as a major disrupter to the financial markets and as it became more clear that he would become President stock markets around the world have plunged. The effect, so far, on currencies has been muted but I suspect we are in for a day of currency movement – some major banks were forecasting significant weakness for the US dollar.
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