‘Aussie’ bullish after RBA decision

Pound Sterling

After hitting a four-week high against the Euro and rising against the US Dollar yesterday by the close of trade Sterling had fallen on the back of lower-than-forecast UK service sector growth. For some this confirmed fears that the better-than-expected third quarter UK GDP was masking underlying weakness in the UK economy. Although Britain’s service sector expanded last month, the pace of expansion was the slowest seen for nearly two years. Movement in the Pound today will likely result from US presidential election news and the NIESR third quarter GDP estimate for the UK.

The Pound is presently trading against the Euro in the region of 1.2508 and is trading against the US Dollar in the region of 1.5980

US Dollar

Last Friday the US Dollar closed trade having achieved a six-month high against its safe-haven rival the Japanese Yen. It began trading this week slightly lower as investors focus on the too-close-to-call outcome of the race for the Whitehouse. Any developments regarding the Presidential election will cause volatility in the ‘Greenback’ today.

The US Dollar is presently trading against the Pound in the region of 0.6257 and is trading against the Euro in the region of 0.7824

Euro

The Euro was sunk in a bearish relationship with the majority of its rivals yesterday as the attractiveness of high-risk assets dimmed before the final stage of the US Presidential election. The common currency also suffered as fears mount regarding Greek fiscal woes. Whilst developments in the US will have a strong impact on the Euro today investors will also be watching out for several key Eurozone data releases, including Markit Services PMI and German Industrial Orders for September.

The Euro is presently trading against the Pound in the region of 0.7991 and is trading against the US Dollar in the region of 1.2769

Australian Dollar

After the Reserve Bank of Australia defied expectations and kept its benchmark interest rate unchanged the ‘Aussie’ was thrust higher and enjoyed a bullish relationship with its peers. Although the RBA was widely forecast to cut the overnight cash-rate target from its developed-world high Governor Glenn Stevens and his board retained the 3.25 per cent figure. The Australian Dollar was prevented from soaring higher as investors concern themselves with the rapidly approaching end of the presidential race and European dissention over Greece.

The Australian Dollar is presently trading against the Pound in the region of 0.6516, is trading against the Euro in the region of 0.8154 and is trading against the US Dollar in the region of 1.0426

New Zealand Dollar

The New Zealand Dollar dropped against its neighbouring currency after the Australian Dollar broadly strengthened. The Reserve Bank of Australia’s decision to hold the level of the overnight cash-rate target boosted the ‘Aussie’ and left the ‘Kiwi’ trailing. However, with Australia being one of New Zealand’s main trading partners the news benefited the New Zealand Dollar too, allowing it to climb against the US Dollar, Euro and British Pound. After New Zealand’s employment figures met expectations the ‘Kiwi’ was able to hold on to its gains. Fluctuations in the currency today will largely result from the outcome of the close run US Presidential election.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5172, is trading against the Euro in the region of 0.6470 and is trading against the US Dollar in the region of 0.8270

Canadian Dollar

After hitting a week’s high against its American counterpart the Canadian Dollar fell on the back of decreased risk appetite. European concerns involving Greece, the imminent US presidential election and a rapid drop in Canadian building permits gave investors pause and pushed the ‘Loonie’ lower. Industry experts are predicting that continued uncertainty regarding Greece’s austerity package could keep the Canadian Dollar trading in its present range for the days to come.

The Canadian Dollar is presently trading against the Pound in the region of 0.6286, is trading against the Euro in the region of 0.7860 and is trading against the US Dollar in the region of 1.0045

 

Richard Martin
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After working in business development for a major UK currency brokers for several years, Richard left Britain to help set up the company’s Australian office and now lives and works in Queensland; making the most of his new Down-Under lifestyle.