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US Dollar (USD) Strengthens following Historic Stock Market Rise

Published: 27 Dec at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Italy,

Pound Sterling (GBP)
The Pound (GBP) was weakened today on the news that Prime Minister Theresa May has reduced her Cabinet ministers’ Christmas break by five days in order to prepare for a possible ‘no-deal’ Brexit scenario, leaving GBP investors feeling skittish into the New Year.

However, Pound exchange rates have managed to remain relatively steady on the temporary lull in Brexit news, with the House of Commons due to reconvene on 7 January to continue debating Theresa May’s Brexit deal.

Tomorrow, meanwhile, will see the release of the UK mortgage approval figures for November, with any signs of bullishness potentially boosting the Pound.

US Dollar (USD)
The US Dollar (USD) was bolstered yesterday after the Dow Jones Industrial Average soared over 1,000 points – its largest single-day point increase in its history.

Today saw the release of the US continuing jobless claims figures for December, which showed a decrease. These were echoed by the US initial jobless claims which also showed a decrease to 216K against last month’s 217K.

Also today was the release of the US housing price index figures for October which showed an increase to 0.3% against September’s 0.2%.

This was followed by the release of US consumer confidence figures which decreased to a worse-than-expected 128.1 against last month’s 133.7, with the economic outlook being the worst in 7 years.

Euro (EUR)
The Euro (EUR) was relatively unmoved by today’s release of a European Central Bank bulletin, which revealed that concerns over Brexit and trade disputes were continuing to limit Euro sentiment.

EUR may further have suffered from the bulletin’s mention of Italy as its ‘largest deviation from existing commitments’ to the Stability and Growth Pact (SGP), with recent concerns over Rome’s budget only recently being amended in lieu with the European Commission’s rules.

Australian Dollar (AUD)
The Australian Dollar was hit last week by rising concerns over the global economy, with the non-publication of China’s release of the Guangdong manufacturing PMIs last week leaving ‘Aussie’ investors nervous and suspicious as Australia’s biggest trading partner shows signs of economic slowdown.

Tomorrow, meanwhile, will see the publication of Australia’s private sector credit figures for November, with any signs of bullishness providing a leg-up for AUD.

New Zealand Dollar (NZD)
The New Zealand Dollar (NZD) has been similarly affected by signs of China’s economic struggles, with the risk-averse currency weakening as investors seek out safe-haven currencies.

With no notable New Zealand ecostats this week, NZD has remained relatively stable and will enter into the New Year awaiting further news on US-China trade relations.

Canadian Dollar (CAD)
The Canadian Dollar (CAD) has faced recent volatility with increasing concerns over low oil prices weakening the Canadian economy into 2019.

Canada’s relationship with China has also been tumultuous since the arrest of Huawei’s Chief Financial Officer earlier this month, which has dampened confidence in CAD as trade tensions mount between the two nations.

As of Thursday, 27th December 2018, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1061, GBP USD exchange rate was 1.2646, GBP AUD exchange rate was 1.7977, GBP NZD exchange rate was 1.8884, GBP CAD exchange rate was 1.7226, and GBP CNY exchange rate was 8.6832.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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