Forex Weekly Round Up 4/1/16 – 8/1/16
Welcome to the first weekly market round up of 2016! We hope you all had a relaxing and enjoyable Christmas and New Year.
World stocks fell again on Tuesday after their worst first-day performance in many years, extending losses as relief at intervention by China to steady its markets quickly evaporated in the face of mounting concerns about the global economy. Despite a cash injection of around $20 billion the Chinese yuan fell to a new 4.5 year low in offshore trade.
The recent turmoil in the Chinese stock markets has again strengthened the Dollar against a host of its major counterparts. With David Cameron threatening a “Brexit” from the Eurozone we are also seeing the Pound come under some selling pressure as this debate unfolds.
The GBP/USD rate is currently at its lowest level since April 2015, we haven’t been below this range since 2010 when the rate fell below 1.43.
Growth across the UK’s service sector dipped last month, suggesting the British economy isn’t growing as fast as hoped. Markit’s UK Services PMI dropped to 55.5 in December, from 55.9 in November. This still shows robust expansion with firms taking on more business but the Markit report said growth in recent months has been slower than in the first half of 2015.
Oil prices fell below $35 per barrel for the first time since 2004 on Wednesday, tumbling more than 5% as the row between Saudi Arabia and Iran made any cooperation between major exporters on cutting output even more unlikely. The international furor over Saudi Arabia’s execution of a Shi’ite cleric ended speculation that OPEC members might agree to production cuts to lift prices.
Adding to this oversupply, Iranian oil exports are widely expected to increase in 2016 as Western sanctions against Tehran are lifted.
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Here are the exchange rates taken at 12:55 today. Please note that all conversions are based on interbank rates without any spreads and should be used only as a guide. For live ‘spot’ and ‘forward’ prices please feel free to drop us a line.
GBP/USD 1.4583
GBP/EUR 1.3418
USD/EUR 0.9201