Consumer confidence has taken a hit this month, falling one point lower to -21 as The UK’s budget looms ever nearer. This was mainly due to consumers predictions for the economic performance deteriorating over the next 12 months, despite what seems to suggest a slight improvement in personal finances. This month’s drop in confidence was markedly lower than September’s drop of 7 points, but this was mainly attributed to Labour’s doom and gloom messaging around the budget.
Continuing with GBP weakness, PMI data yesterday morning reflected further support for a slowing economy in part due to employment numbers overall showing a decline for the first time this year. The Bank of England usually places great emphasis on the state of employment in The UK, as a positive jobs market generally goes hand-in-hand with higher wages, which in turn keeps inflation elevated at a healthy level.
Turning our attention to The USD, the safe-haven asset is on course for it’s fourth straight week of gains which have largely been helped by a fall in expectations for aggressive rate cuts by The Federal Reserve. Reasonably healthy economic data has seen markets scale back their expectations, helping to keep some calm around The US Dollar. It is however expected to suffer some volatility next week as we have the eagerly anticipated release of US Payrolls next week. Just a few days after this release, we have the US Election and although markets right now are suggesting it’s too tight to call, markets and betting odds are increasingly leaning in favour of Trump. It does seem to look like a Trump win in the election could well strengthen the safe-haven currency due to previous economic results from Trumps last term as President.
GBP/EUR 1.1981 GBP/USD 1.2969 GBP/AED 4.7656
GBP/AUD 1.9572 GBP/CHF 1.1240 GBP/CAD 1.7964
GBP/NZD 2.1623 EUR/USD 1.0812 GBP/ZAR 22.9334