The pound is well bid against most majors overnight. The UK’s process of buying military equipment has been hampered by a desire for “110% perfection” but the increasing reliance of weapon systems on electronics and software could help solve the problem, according to Britain’s defence procurement minister. Jeremy Quin said the long-running problem was a result of an attitude in the armed forces that new equipment had to have “every single mod com that is going to be needed in 10 years’ time” in an attempt to ensure it is future-proof. Quin’s remarks underline the UK’s poor record on military procurement, which is littered with projects running late and over budget. The latest is a £5.5bn programme to procure a family of armoured vehicles for the army, known as Ajax, equipped with the latest digital sensors.
The euro is higher than the dollar and lower than the pound in the early morning trade. The leader of Germany’s liberal Free Democrats has set strict conditions for joining a possible coalition with the Social Democrats and Greens after next week’s national election, demanding tax cuts, curbs on new borrowing and a return to pre-pandemic spending rules. “The prerequisite for us joining any coalition is that we can’t have tax increases and we respect the constitutional debt brake,” said Christian Lindner, leader of the FDP. With 11 days to go until an election that will decide who succeeds Angela Merkel as chancellor, polls suggest power could potentially pass from her centre-right CDU/CSU bloc to a three-party coalition made up of the SPD, Greens and FDP.
The dollar is weaker than most majors this morning. US consumer prices rose at a more moderate pace in August, in a sign that inflationary pressures associated with the economic reopening from Covid-19 lockdowns are easing slightly after reaching a 13-year high. The consumer price index published by the Bureau of Labor Statistics on Tuesday rose 5.3% in August from a year ago — just below the 5.4% level reported previously, which is the highest since 2008 and in line with the 5.3% forecast by economists. Month-over-month price gains slowed to 0.3% from July. That is markedly lower than the 0.9% jump reported between May and June and a drop-off from the most recent 0.5% rise from June to July.
Ballinger & Co. Morning Report–15th September 2021
GBP>EUR – 1.1706
GBP>USD – 1.3835
EUR>USD – 1.1818
GBP>CAD – 1.7541
GBP>AUD – 1.8881
GBP>SEK – 11.885
GBP>AED – 5.0795
GBP>HKD – 10.759
GBP>ZAR – 19.786
GBP>CHF – 1.2713
· CAD BoC Consumer Price Index Core (YoY)(Aug)
· NZD Gross Domestic Product (YoY)(Q2)
· NZD Gross Domestic Product (QoQ)(Q2)
· Forex Today: Dollar shrugs off weak inflation, China worries mount, cryptos rise
· GBP/USD Forecast: Sterling fails to break higher, fundamentals fight back, levels to watch
· EUR/GBP remains pressured below 0.8550 ahead of UK critical data
· USD/CAD: Loonie trades cheap, rallies to 1.28 an opportunity to sell – TDS
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