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Hi All,

As promised here’s a brief update on what’s been happening with the US Dollar over the last week.

For a majority of last week the market spent time looking for reasons as to why the Fed should start to tighten monetary policy in H2 2010. Manufacturing PMI (55.9 from 53.6) data was encouraging, Factory Orders (+1.1% m/m) and Auto Sales (11.3m) were also upbeat. The FOMC minutes from the December 15-16 meeting were closely scrutinised but with Board members still worried about the fragile housing market, high unemployment and the effects of winding back quantitative easing there was little for the interest rate bulls to latch on to. The employment data is always closely watched in the first week of any month and December Non-farm Payrolls (- 85k) disappointed the market but November was revised to show an increase in Payrolls of 4k from -11k. The Unemployment Rate held at 10% but this would have been much higher had a shockingly large number of discouraged jobseekers (929k) not left the work force completely. Finally, Consumer Credit plunged by a record 17.5b in November and dropped for the 10th straight month, which is the longest streak since records began in 1943. Although debit cards (not included in credit data) have been picking up some of the slack in credit spending, this does not bode well for a sharp return to consumer led growth that has been the saviour of previous US recessions. On this theme Retail Sales will be watched closely this week along with Industrial Production and the Empire State Manufacturing Index.


GBP/USD Movement – High’s & Low’s of last week (04/01/10 – 08/01/10)

High’s: 1.6242
Low’s: 1.5897

A movement of: 2.17%

Difference on £200k

High: USD324,840
Low: USD317,940

Difference of: USD6,900

Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely you are to make your money go further.

A further update will be added next week.

Regards




Jon Sermon
HiFX
 
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