STERLING FALLS AGAINST EURO, BUT DOLLAR IS WEAKENING
It seems Greece got a bit bored with being out of the headlines and so yesterday PM Tsipras decided to quit and call for another round of elections on 20th September. This is yet another power play by Tsipras as he has lost support from many anti-austerity, anti-bailout rebels in his own party. He is looking to broaden both his own personal support base and support for the bailout programme. Yesterday, we also saw Greece receiving new bailout funds and promptly meeting the deadline for the ECB repayment.
Sterling has weakened against the Euro over the last few days and this has continued with better than expected PMI data from Germany and the Eurozone.
However, we have seen Sterling rise against the US Dollar as the possibility of September rate hikes appear to be diminishing following on from Wednesday’s dovish Federal Open Market Committee minutes.
China has gripped the markets recently as we have seen their stock markets plummet by nearly 11% in the last week. Having devalued the CNY by 3%, we are now witnessing some of the impact of the demise of the Chinese economy. Commodity-based currencies, such as Australian Dollar and New Zealand Dollar are the most affected due to China consuming 40% of the world’s economy output.
Main data to come out for the rest of the day is US Manufacturing PMI and Eurozone Consumer Confidence.
Have a good weekend.