‘Aussie’ drops to a four-month low

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Pound Sterling

With economists expecting that this morning’s fourth quarter UK GDP data will show contraction the Pound slid against the Euro for a second day. Sterling also continued to trade within the region of a two and a half year low against the US Dollar. If the UK economy is shown to have contracted by more than the 0.3 per cent predicted Sterling could tumble in the hours ahead.

The Pound is presently trading against the Euro in the region of 1.1551 and is trading against the US Dollar in the region of 1.5116

US Dollar

Although the US enjoyed better-than-forecast consumer confidence and housing data yesterday the outlook for the world’s largest economy dimmed as Federal Reserve Chairman Ben Bernanke asserted that the spending cuts scheduled to take place at the beginning of March could prove damaging to American recovery. Today investors will be focusing on US Durable Goods Orders and US Pending Home Sales data.

The US Dollar is presently trading against the Pound in the region of 0.6619 and is trading against the Euro in the region of 0.7641

Euro

The Euro gained on the safe-haven US Dollar this morning before Italy auctions up to 5 billion dollars worth of long term debt. The common currency’s advance was tempered as Bernanke’s comments regarding the risks accompanying an imminent series of spending cuts in the US knocked the global economic outlook. The outcome of the Italian bond auction and economic confidence figures for the Eurozone could trigger Euro movement today.

The Euro is presently trading against the Pound in the region of 0.8659 and is trading against the US Dollar in the region of 1.3087

Australian Dollar

The inconclusive Italian election saw the ‘Aussie’ drop to a four-month low against its American counterpart. Renewed concerns regarding the Eurozone’s economic stability, combined with Fed Chairman Ben Bernanke’s comments on the dangers of US spending cuts, led investors to turn away from riskier assets like the Australian Dollar. Tomorrow’s Australian New Home Sales, Private Sector Credit and wage data could cause ‘Aussie’ volatility.

The Australian Dollar is presently trading against the Pound in the region of 0.6754, is trading against the Euro in the region of 0.7800 and is trading against the US Dollar in the region of 1.0208

New Zealand Dollar

After posting declines against the majority of its most traded peers as a result of political uncertainty in Europe, demand for the New Zealand Dollar weakened further following the release of disappointing data for the South Pacific nation. The ‘Kiwi’ softened against safe-haven counterparts the US Dollar and Japanese Yen as New Zealand’s trade deficit was shown to have widened unexpectedly. While global economic developments will have an effect on the South Pacific currency today building permit data for New Zealand will also be of interest.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5463, is trading against the Euro in the region of 0.6354 and is trading against the US Dollar in the region of 0.8246

Canadian Dollar

The Canadian Dollar weakened to its lowest level since June yesterday, losing ground against its US counterpart as a result of declining oil prices. The ‘Loonie’ was also adversely affected by Fed Chairman Ben Bernanke’s warnings regarding the damage a series of automatic spending cuts could cause to the US economy, Canada’s largest trading partner. Of particular interest to the Canadian Dollar today are US Durable Goods Orders data. US pending home sales figures will also be of interest.

The Canadian Dollar is presently trading against the Pound in the region of 0.6455, is trading against the Euro in the region of 0.7453 and is trading against the US Dollar in the region of 0.9752

These exchange rates were correct as of 9:04 am

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.