Yen gained 1.2 per cent on the New Zealand Dollar

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Pound Sterling

Yesterday top ratings agency Fitch commented that a downgrade of the UK’s AAA rating may not be a ‘decided event’ but is something which could occur if Britain’s economy continues to falter and remain vulnerable to global economic shocks. Despite this the Pound was still able to gain on several of its peers, including the Euro, American Dollar and Australian Dollar, over the course of the afternoon. With no significant economic news for the UK due for release today Sterling fluctuations are likely to be the result of developments in the Eurozone and US.

The Pound is presently trading against the Euro in the region of 1.2065 and is trading against the US Dollar in the region of 1.6011

US Dollar

Although Fed Chairman Ben Bernanke’s recent pessimistic speech triggered a bout of risk aversion and boosted safe-haven currencies like the US Dollar, indications that Japan may not initiate monetary easing to the extent previously thought caused the ‘Greenback’ to drop against the Japanese Yen. Today the main cause of movement in the American currency will be this afternoon’s US CPI figures. If they come in above last month’s levels risk appetite could grow and the ‘Greenback’ could post losses against its higher-yielding peers.

The US Dollar is presently trading against the Pound in the region of 0.6245 and is trading against the Euro in the region of 0.7528

Euro

Yesterday evening Luxembourg Prime Minister Jean-Claude Junker asserted that the Euro, after enjoying recent gains, was ‘dangerously high’ posing a threat to trade and Eurozone growth through trade channels. After the comments the common currency fell back from its 10 month high against the US Dollar and plummeted by 1.8 per cent against the Japanese Yen. Volatility could be experienced today following the release of Eurozone CPI figures and the announcement of the German economy minister’s economic outlook.

The Euro is presently trading against the Pound in the region of 0.8286 and is trading against the US Dollar in the region of 1.3265

Australian Dollar

The Australian Dollar continued to fall against the Japanese Yen following disappointing consumer confidence data for the South Pacific nation. Consumer confidence was relatively unchanged from a two-month low which contributed to fears that the Australian economy is flat lining. Consequently the ‘Aussie’ also fell against the majority of its other most traded peers. Tomorrow significant movement can be expected following the release of Australian employment data.

The Australian Dollar is presently trading against the Pound in the region of 0.6585, is trading against the Euro in the region of 0.7947 and is trading against the US Dollar in the region of 1.0544

New Zealand Dollar

After the Japanese economy minister asserted that an excessively weak Yen could have a negative effect on the nation’s imports the safe-haven currency turned bullish against its rivals, gaining by 1.2 per cent on the New Zealand Dollar. The ‘Kiwi’ also dropped against several of its other counterparts, shedding 0.4 per cent against the US Dollar. In the days ahead ‘Kiwi’ fluctuations are most likely to result from global economic developments.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5224, is trading against the Euro in the region of 0.6303 and is trading against the US Dollar in the region of 0.8388

Canadian Dollar

The Canadian Dollar hit a six-month low against a broadly strengthening Japanese Yen on the back of comments made by the Japanese economy minister. The ‘Loonie’ also dropped against its American counterpart following a fall in Canadian existing home sales. Today signs of recovery in the US economy, in the form of positive data releases, could benefit the commodity-driven Canadian currency.

The Canadian Dollar is presently trading against the Pound in the region of 0.6332, is trading against the Euro in the region of 0.7642 and is trading against the US Dollar in the region of 1.0142

 

Laura Barrett
This post was written by
Laura moved from the US to the UK several years ago. As a corporate sales executive for a leading foreign exchange company, Laura has expert knowledge of currency movements and market trends and is able to offer specialist guidance regarding making a trade at the most lucrative time and protecting transactions from currency risk.