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  • richard evans

US dollar higher, so are UK taxes

Good morning

It was a good day for US dollar yesterday as it moved higher across the board. Interesting that the dollar rally came just as GBP and EUR had failed at upside levels, 1.3900 and 1.1900 respectively. Feds Bullard further supports the US dollar with a comment that Fed should dial back support despite the recent disappointing jobs data.

UK did raise national insurance rates yesterday in an attempt to help funds the NHS and social care. The move is widely criticised as it goes against the Tory party manifesto, however the reality is there is a global pandemic to pay for and the money has to come from somewhere. I still think the NHS does a terrific job but I do not think it is run as efficiently as it should. There was shock as tax on dividend income was also put up 1.25% from 7.5% to 8.75% for next year. The idea according to UK PM Johnson is the cost of social care will be spread between individuals and businesses. Not great for small businesses unfortunately.

Meanwhile Sturgeon has said she expects another Scottish independence referendum before the end of 2023. GBP is a touch weaker with GBPUSD now 1.3770, EURGBP at 0.860 (GBPEUR 1.1630).

BoC rate announcement later today, no policy changes expected, as always the interesting thing will be to see the sort of tone the Bank takes in its statement. UDSCAD now 1.2675 with half an eye on the key 1.2700 level where it failed at the end of August.

I have seen a couple of major banks talking about the possibility of the markets to under estimate the potential changes in German politics. A new coalition could lead to greater integration with Europe, perhaps creating a more unified EU fiscal approach. That’s the theory anyway. EURUSD now 1.1840.

Apple is expected to release its latest line of iPhones next week, having sent invitations for a launch event of 14th Sept. It has been a while since we have seen anything really ground breaking, mostly just updates to existing products, but its always interesting to see if Apple has come up with a product none of know we really need.

It was another stunning day of weather yesterday and today looks like more of the same with temperatures set to hit close to 30 degrees. Would be great except the football team is training later today, I’d normally call it off if its too hot but this will be our last session before the start of the season this coming weekend so thought we’d better keep at it. Keeps me out of mischief I guess.

- 09.10 RBAs Debelle speaks

- 15.00 US JOLTS job openings

- 15.00 BoC rate announcement

- 15.00 CAD Ivey PMI

- 16.00 BoEs Bailey speaks

- 18.10 Feds Williams speaks

- 19.00 Fed Beige Book

- 00.01 UK RICS house prices

- 02.30 China CPI

- 07.00 German trade balance

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