Sterling hits new 10 month high
Sterling has hit a new 10 month high against the dollar, as the US currency continues to struggle with the uncertainties caused by the actions and comments from the president.
The pound is currently up 0.35% at $1.3178, having earlier hit $1.32 for the first time since 16 September. Neil Wilson, senior market analyst at ETX Capital, said:
Sterling jumped to fresh 10-month highs as the end of month 4pm fix sent cable higher. The pound exploded higher to $1.31999, having the briefest of flirts with the $1.32 handle before easing back. The move came as the dollar heads for its worst month since January. Cable is now trading at its highest since mid-September 2016 on this sustained bout of dollar weakness. Clearly it’s all to do with Donald Trump saying it was too strong and the market having confidence in him…more likely it is the exact opposite – concerns about the chaos in Washington and a complete lack of faith in the administration delivering any kind of meaningful economic or fiscal reforms.
There is also growing doubt that the US Federal Reserve will be in a position to raise interest rates again in the immediate future.
Oil slips back following Opec report
After its earlier gains on Venezuela’s problems, the oil price is now on the slide.
Opec crude output rose by 90,000 barrels a day this month to a high for the year, according to Reuters, as supplies from Libya continued to recover.
So, ahead of a meeting next week between Opec and non-Opec producers, Brent crude is now down 0.4% at $52.28 a barrel, having earlier reached a peak for the day of $52.92.
Updated at 4.19pm BST
Back with the UK consumer credit figures, and TUC general secretary Frances O’Grady has called for the government to take action:
Wages are still lower than before financial crisis, so it’s no wonder that families are being forced deeper and deeper into debt.
If working people don’t see extra cash in their pocket, borrowing will continue to spiral. Setting aside mortgages, household debt is likely to hit an all-time high this year.
The government needs to boost investment to get wages rising again. They should start by ending public sector pay restrictions and putting the minimum wage up to £10 as soon as possible.
Meanwhile Elliott Silk, Head of Commercial at Sanlam UK, said:
The Bank of England’s actions to curtail the growth of unsecured loans has had some impact, but more action is needed. While consumer credit accounts for a fraction of household debt, people are much more likely to default on unsecured loans. A lot of this has to do with understanding the area – there is a lack of financial education on the national curriculum, which means young people often come out of education naïve to the negative consequences of unsecured loans and personal debt. Companies also have a large part to play in the financial wellbeing of their employees – otherwise, they too will feel the negative impact that financial stress can have on employee performance.
Bank of England strike to go ahead – PA report
The Press Association is reporting some bad news for Bank of England governor Mark Carney ahead of this week’s monetary policy meeting:
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US markets continue to be buoyant, despite a relatively quiet day in terms of economic and corporate news. But there is a lot coming up this week for investors to get their teeth into, which could well provide some volatility. Connor Campbell, financial analyst at Spreadex, said:
There wasn’t all that much to drive the index higher this Monday, with investors perhaps enjoying the calm before the storm of data and earnings brought by the first few days of August.
Tuesday’s Markit and ISM manufacturing PMIs are joined by Fed-favourite inflation gauge the core PCE price index and, most crucially, Apple’s latest earnings update. Wednesday then has the ADP employment change reading, before Thursday’s double dose of services PMIs and, finally, Friday’s non-farm jobs report. In other words, plenty to challenge the Dow’s recent rise.