GB POUND
A mixed start to the week for the pound as it started the week trading at 1.1725 against the euro, and 1.2495 against the US dollar. It quickly began to come under pressure following a report from the OECD (Organisation for Economic Co-operation and Development) who are predicting that growth in the UK will begin the fall over the coming years. They expect growth to slow to 1.2%.
The Governor of the Bank of England, gave a warning about the worrying levels of debt in UK households. Figures released by the bank this week showed that credit card lending is at a record high, up by £571m last month. Overall unsecured debt, which includes overdrafts is rising at its fastest pace for 11 years.
On Thursday the pound hit a 12 week high against the euro after “Brexit” minister David Davis said that Britain would consider making payments to the EU budget in return for access to the single market. His comments have fuelled hope that Britain could avoid a “hard Brexit”.
EURO
At the ECB press conference on Monday Mario Draghi expressed his concerns about Britain leaving the EU, he also reiterated that “the single market cannot go backwards” as he attempts to dissuade other countries from following Britain and voting to leave the EU.
Official figures showed that unemployment in the eurozone has fallen below 10% for the first time since 2011. The eurozone manufacturing report also showed that manufacturing in the single bloc has risen to its highest level since 2014.
US DOLLAR
The price of oil has increased after an agreement by the Opec group of oil producing nations to cut output. Brent crude increased by 4.5% to $54.19 a barrel, the highest level this year. This is the first cut by OPEC for 8 years, and is designed to reverse a slump in global oil prices and will see the group reduce production by 1.2 million barrels a day from January.
The unemployment rate in the US fell to a nine-year low in November, adding to the speculation of a rate hike later this month.
Data from the Labour Department showed that the US economy created 178,000 jobs in November, the jobless rate also fell from 4.9% to 4.6% in October.
Economists are now certain that the Fed will raise interest rates at its next meeting.
Elsewhere
Retail sales in Australia came in above expectations, forecast at 0.3% it came in at 0.5%.
Good news for the Canadian economy as official figures showed that the Canadian economy grew by 3.5% in Q3.
