“I'll probably never sing in a choir or anything, but it's exciting to talk normally, and I can't wait to eat and drink and swim again." That was the voice of Ms Jensen, a woman who has spent the last decade mute and fed through a tube but who recently underwent surgery to replace her damaged larynx. She is speaking for the 1st time in 11 years and is starting to recovery her senses of smell and taste. If that miraculous medical work having a really positive result doesn’t start your Friday with good feeling, then I don’t know what will.

There was nothing anywhere near as miraculous going on in the financial markets; it was more like another day and another facet in this frustratingly sluggish UK recovery. The Confederation of British Industry released its Industrial Trends survey yesterday and both the domestic and export sectors were negative. Sterling was already struggling against a recovering Euro bit had been doing rather well against the US Dollar. Yesterday Morning saw the Pound take a break while we awaited the release of the European Central Bank’s Monthly bulletin. It was essentially the same as the previous month except there was a nod towards the potential for moderate improvements in growth.

The result of all these factors was that the Pound made a moderate recovery against all but the Euro through the latter part of the Day and the Euro was in fairly good form against the US Dollar and other currencies. Sterling is still relatively well supported after this week’s sharp inflation rise and the prospects for higher interest rates before the end of the 1st half of the year.

The European news was dominated by the debate amongst EU finance ministers over the longer term plans to ensure financial support for struggling Eurozone members. They seem to have done enough to calm frazzled nerves amongst Euro traders and the strength of the euro in recent days supports that view. If today’s German IFO business sentiment surveys are supportive, and they probably will be judging from recent German data, then we may well end the week with a strengthening Euro. I know that is not what Euro buyers want to hear but I did highlight the technical resistance to further rises a few days ago and that top, around €1.20 appears to have done its job. €1.15 could well be on the cards in the interbank market in the next few days.

Elsewhere, the Australian and New Zealand Dollars both weakened yesterday as commodities slipped and as the effects of a Chinese slowdown start to be factored into the value of these currencies. The Kiwi dollar ought in fact to have strengthened because the overnight news was an improvement in both retail sales and in business sentiment but the importance of Australia and China as export markets (when China is also Australia’s major export market) was clearly an overwhelming force.

The Canadian Dollar lost some ground yesterday as well alongside the US Dollar (the USA is Canada’s major export market) and ahead of today’s retail sales data which is forecast to have weakened somewhat. Here is a chance of further Canadian Dollar weakness in the next 2 hours so those with Canadian Dollars to buy may want to place automated orders to ensure they capture the best of the American trading hours as well.

The South African rand lost a bit of ground yesterday as well after the South Africa Reserve Bank decided to keep the base interest rate on hold at 5.5%. The move was largely in line with expectations but it does put off the chance of an interest rate hike for another three months or so.

And finally, I am still a big fan of the Monty Python movies and there is a scene in The Holy Grail when the king boasts that “They said we couldn’t build a castle on t’swamp but we did....... it sank”. Sadly, the same could be said of The World. I don’t mean the whole world where we all live but The World made of man-made sand islands off the coast of Dubai. It looks like a marvel of engineering but it appears to be slipping back into the sea while the channels between the islands are silting up and the multi-million dollar properties that is supports could well slip back into the sea as well. It’s odd isn’t it that Venice was made in much the same way, built on logs and rocks but that is still there centuries later. The World is barely a decade old. They don’t make ‘em like they used to do they!

Have a great weekend everyone.


Quote

There are only two ways to live your life. One is as though nothing is a miracle. The other is as though everything is a miracle.
Albert Einstein