Catalonia elections dim the Euro’s prospects

Pound Sterling

After dropping to a one month low against its European cousin on the back of an improved Eurozone outlook, the results of the regional election in Catalonia dimmed the Euro’s prospects causing the Pound to rebound slightly. Sterling also advanced against the US Dollar and Japanese Yen. Fluctuations in the British currency can be expected today as Eurozone finance ministers meet in Brussels to bring an end to the uncertainty surrounding the Greek bailout.

The Pound is presently trading against the Euro in the region of 1.2357 and is trading against the US Dollar in the region of 1.6033

US Dollar

The safe-haven US Dollar recorded losses against several of its riskier counterparts on Friday on the back of positive developments in the Eurozone. However, the ‘Greenback’ was able to recoup its losses against the common currency after political manoeuvrings in Spain threw the Euro’s recovery into doubt once more. In the absence of US economic news the main point of interest today will be the Greece-focused meeting of Eurozone finance ministers.

The US Dollar is presently trading against the Pound in the region of 0.6237 and is trading against the Euro in the region of 0.7707

Euro

After five days of gains the Euro dropped against several of its main competitors. The decline was triggered as pro-independence parties in Catalonia won a regional vote, bolstering a drive for a referendum on succession despite Spanish Prime Minister Mariano Rajoy’s protests. The political concerns heightened worries that Spain may continue to delay requesting a bailout. Significant volatility can be expected in the common currency today as Eurozone finance ministers meet in Brussels once more to come to terms on an aid package for Greece.

The Euro is presently trading against the Pound in the region of 0.8093 and is trading against the US Dollar in the region of 1.2975

Australian Dollar

Along with other higher-risk currencies the ‘Aussie’ gained as hopes of resolution on the issue of Greek aid rose. If Eurozone finance ministers finally decide to unlock over 30 billion Euros of aid during their meeting today the Australian Dollar could continue to benefit. This week investors will also be focusing on Australian new home sales figures, scheduled for release on Thursday.

The Australian Dollar is presently trading against the Pound in the region of 0.6523, is trading against the Euro in the region of 0.8060 and is trading against the US Dollar in the region of 1.0458

New Zealand Dollar

After the influx of spending in the US over the course of Black Friday hopes of a pickup in consumer spending in the world’s largest economy led to the New Zealand Dollar hitting a month high against its US counterpart. The South Pacific currency was also supported by positive developments in the Eurozone. Later in the week ‘Kiwi’ movement could result from New Zealand business confidence data.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5136, is trading against the Euro in the region of 0.6324 and is trading against the US Dollar in the region of 0.8235

Canadian Dollar

On Friday the Canadian Dollar was able to achieve a two-week high as business sentiment in Germany strengthened and hopes grew that the Greek bailout could soon be settled. These international developments improved prospects for global economic recovery and had more of an impact on the ‘Loonie’ than Canadian data which demonstrated a slightly higher than anticipated increase in consumer prices. This week Canadian Dollar movement could be caused by developments in the Eurozone and Friday’s release of Canadian quarterly GDP.

The Canadian Dollar is presently trading against the Pound in the region of 0.6284, is trading against the Euro in the region of 0.7765 and is trading against the US Dollar in the region of 1.0075

 

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.