The mixed bag that is the global economy was evident overnight in Asia, which started the week on a poor note. China grew by 7.7% in Q1 it emerged, down from the 7.9% in Q4 of last year, with both manufacturing and consumption leaving a lot to be desired. Industrial production was 0.5% lower than this point last year while retail sales were shown to have declined 1.9% through the last 12 months.

 

While these figures are not disastrous it once again calls into question what the Chinese authorities can do to stimulate things whilst keeping inflation, which has been moving higher in recent months, under wraps. Investment projects are being mooted but how many airports does one country need?

 

Needless to say the disappointment of the Chinese GDP miss was taken out on AUD and NZD with general buying of risk-averse assets (USD, JPY, haven bonds) was also in evidence. The geo-political risks from the Korean peninsula could also be lagging markets lower this morning as well. Today is the anniversary of Kim Il Sung’s, the founder of North Korea, birthday and the ratcheted up tensions in that part of the world has almost ensured that any celebrations by Kim Jong Un may be slightly more provocative than previous.

 

Friday’s poor retail sales numbers from the US failed to critically damage the US dollar but the largest fall in sales in 9 months has to call into question just how strong or stable this recovery is. The Fed’s Beige Book of regional surveys is due later this week and should give us a more granular look at the US economy post-sequestration.

 

The Eurogroup meeting in Dublin saw few headlines after  Friday’s decision to give both Ireland and Portugal an extra 7 years to pay back their bailouts. These will have to be approved by individual governments with specific issues such as the Portuguese EUR1.3bn funding hole that needs filling following the recent constitutional court decision. Troika officials are due in Lisbon today to look over the books once again and ensure the release of the next round of funding.

 

While the Eurogroup meeting is over, the G20 meeting in Washington will be taking place at the end of the week and we would put money on the yen and its recent and sustained weakness being the top topic. The US Treasury vowed to “continue to press” Japan over the weakness of the currency; an all-together unsubtle “pack it in” you would think. Bank of Japan Governor Kuroda was at pains to clarify that a weaker yen was not BOJ policy last week.

 

Have a great day.

 

View the latest exchange rates and live graphs here.

 

Indicative Rates

Sell

Buy

GBPEUR

1.1709

1.1730

GBPUSD

1.5321

1.5342

EURUSD

1.3076

1.3097

GBPJPY

150.38

150.61

GBPAUD

1.4683

1.4708

GBPNZD

1.8039

1.8063

GBPCAD

1.5620

1.5642

NZDUSD

0.8487

0.8507

GBPZAR

13.79

13.84

USDZAR

8.9997

9.0207

GBPPLN

4.8001

4.8213

EURJPY

128.50

128.72

Please note these rates are “interbank” rates i.e.   they indicate where the market is currently trading and are not indicative of   the rates offered by World First.  Rates are dependent on amount   transacted. It is important to remember that foreign exchange rates   fluctuate all the time. The rate you will receive will depend on the amount   and currency you require. Please call 0808 115 5821 or 020 3393   7836 for a live quote or login in to your World First Online account here.