Dollar Rally Continues

11 January, 2016

Simon Eastman

Last week was very much sentiment led as we saw investors plough their funds into the safe haven US dollar.

With the Chinese stock market crashing twice, investors across the globe are concerned as the shares in the worlds second largest economy tumbled, triggering the markets safety mechanism to action twice, the second being after only 25 minutes of trade. The trigger is there to stop over selling so if the share index drops a certain amount trading is halted and with this happening twice investors are rightly concerned.

The effect on the currency markets was as is the norm in such situations, that money is out into safe bets, the dollar being the main beneficiary of this along with the Japanese Yen. From our pint of view, we saw sterling drop across the board against the dollar and euro reaching levels against the greenback not seen since 2010.

The data we have seen, although a mixed bag of positive and negative, has had little effect and is likely to remain this way as sentiment is driving investors and with little to support the pound, it’s unlikely we will see much of a change in the current direction, so if you have a currency purchase to make in the coming days or weeks, it may be prudent to action it sooner rather than later. Speak to one of the CI team today to discuss the options available for safeguarding your rate and avoid any further losses.

The data out this week which could affect your currency transfer is listed below.

Monday – US labour market conditions

Tuesday – UK retail sales, industrial and manufacturing production, NIESR GDP estimate.

Wednesday – Non-monetary policy ECB meeting, EU industrial production, US budget statement, NZ retail sales, AUS employment data

Thursday – UK BoE interest rate meeting and policy statement, ECB monetary policy meeting, US jobs data, Canadian house data. 

Friday – US retail sales