Monex: EUR/USD stabiel na tegenvallende cijfers Duitse industriële productie
Monex: EUR/USD stabiel na tegenvallende cijfers Duitse industriële productie
Hieronder volgt een kort commentaar in het Engels van Ranko Berich, Head of Research bij Monex Europe op de Amerikaanse dollar, euro en het Britse pond.
EUR
The euro is holding steady against the dollar this morning after disappointing industrial production data from Germany failed to move the pair. Month on month industrial output in July increased by a mere 1.2%, far below the expected 4.5% and surge of 9.3% in June. This Thursday’s European Central Bank meeting will be of interest for markets this week after the recent strengthening of the euro and the latest Federal Reserve announcement regarding the Flexible Average Inflation Targetting (FAIT), which has also added upwards pressure to the euro. The key part of the meeting and press conference will be ECB President Christine Lagarde’s comments on the euro exchange rate. While a stronger euro could potentially dampen the effectiveness of loose monetary policies by a counterproductive pass-through into inflation, the recent strength may not be enough to trigger policy action by the ECB just yet. The ECB has stressed that the impact of exchange rate moves on inflation and growth depends on the nature of the shock and many structural factors, and studies from the central bank show that pass-through from the exchange rate to inflation has weakened over time. The door to more stimulus will depend on dramatic changes to the economic outlook, where any downward revision will increase the likelihood of additional easing.
GBP
Sterling is the worst performing G10 currency this morning, after the risk of a no-deal Brexit, now being referred to as “Australia-style” arrangements by the UK Government, has once again come to the forefront for markets and media. The Financial Times broke the news last night that Boris Johnson’s Government is planning to publish legislation that will “override” parts of its previous withdrawal agreement with the EU. The internal markets bill, which will be published on Wednesday, will reportedly “eliminate the legal force of parts of the withdrawal agreement”, specifically with respect to Northern Ireland. Communications from the Government have been taken a bellicose tone in recent days, with chief negotiator David Frost saying in a TV interview the UK would not become a “client state” of the EU. Boris Johnson himself has issued statements to media, which he will say out loud at some point today, that if an agreement is not reached by October 15th, both sides should “move on”. Aside from some brief and generic comments from chief EU negotiator Michel Barnier, the EU has not responded to these developments. The topic will be in focus for the rest of the week as negotiations continue and the UK legislation is published.
USD
The dollar is trading with a mildly defensive tone this morning, although within recent ranges against several important currencies such as EUR and JPY. Friday’s jobs report in the US showed another solid month of re-hiring, with the economy adding almost 1.4m jobs on net. However, permanent job losses began to rise again in August, and have totalled more than 2 million since February. Of the 6 million or so people still on temporary layoff, a proportion will inevitably join the ranks of the permanently unemployed, creating a lasting drag on households that will require a sustained policy response. In addition to the ongoing Presidential race, a number of data releases will be in focus for the dollar this week, although the US will enjoy the Labour Day holiday today. The job openings and labour turnover summary will be released on Wednesday, followed by producer prices on Thursday and official inflation data on Friday.