Pic: Dr R Eric Swanepoel
It is said that the attention span of
a goldfish is about nine seconds, or as long as it takes it to swim around its
bowl. In the case of the Foreign Exchange market it is a little longer, but not
much.
The proof of this is in the attention
given to the upcoming referendum on whether or not Scotland will become
independent of the rest of Britain. Some short weeks ago the British pound was
surging ahead against all its major counterparts, most notably the US dollar
and the Euro. Then, during the month of August, a quiet time for the markets in
any event, it started to stagnate.
UK fundamentals had not dis-improved
materially, so any softness could well have been attributed to a certain amount
of uncertainty about the possible outcome of the referendum.
Now, the plebiscite is two weeks away
from this coming Thursday. Yesterday, a poll carried out by the YouGov organisation
suggested that the vote outcome is likely to be closer than had previously
been predicted, with the possibility of independence being the chosen way
forward coming more into prospect.
So the pound went into a tailspin. It
even lost ground against the Euro, which is saying something, as the Single
Currency has been battered of late.
This behaviour makes our decision to
remain on the sidelines for the time being with regard to Sterling a good one.
As-you-were
for the Aussie dollar
The outcome of the annualised GDP
figures for Australia were released last night GMT. They came in at 3.1% growth
for the year, a good result considering that 3.0% had been expected, but a
little less than the 3.5% recorded for last year.
In a speech, RBA governor Glenn Stevens declared
that there will be no further interest rate reductions in Oz, as the housing
market is in danger of overheating due to cheap loans.
All of this has had the effect of
maintaining the hitherto robust nature of the Aussie dollar exchange rate. Mr.
Stevens thinks it is too high but is not, apparently, willing to do anything
concrete to bring it down.
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