Cyprus situation triggers a bout of risk-aversion

money_pesos

Pound Sterling

The Pound strengthened to a three-week high against the US Dollar yesterday after UK retail sales climbed by more-than-forecast in January. Shortly after, the British currency brushed a five-week high against the Euro after the common currency broadly softened as a result of developments in the Cyprus situation. If Cyprus hopes to secure the financial aid it desperately needs the nation must agree to a bailout package by Monday.

The Pound is presently trading against the Euro in the region of 1.1759 and is trading against the US Dollar in the region of 1.5184

US Dollar

The escalation of the Cyprus situation triggered a bout of risk-aversion which saw investors flocking to the safe-haven US Dollar. As a result the ‘Greenback’ broadly strengthened against the majority of its most traded currency rivals. The American currency also benefited from the news that US jobless claims fell. Situation updates from the Eurozone are likely to be the main cause of market movement in the hours ahead.

The US Dollar is presently trading against the Pound in the region of 0.6587 and is trading against the Euro in the region of 0.7744

Euro

Hopes for a swift resolution to the Cyprus crisis were dashed after the nation’s talks with the Russians came to nothing and the European Central Bank issued Cyprus an ultimatum. Either the country agrees to a bailout package before Monday or it loses the emergency funding it requires – leaving it open to expulsion from the Eurozone. As a result of these developments the Euro slumped to within reach of a fresh four-month low against the US Dollar. The common currency also lost significant ground against the British Pound and Japanese Yen.

The Euro is presently trading against the Pound in the region of 0.8504 and is trading against the US Dollar in the region of 1.2914

Australian Dollar

Following a positive increase in the Australian Conference Board Leading Index, which is used to predict short to mid-term national economic growth, the ‘Aussie’ posted modest gains against several of its biggest currency rivals. However, advances in the Australian Dollar were limited by news of the ECB issuing an ultimatum to Cyprus.

The Australian Dollar is presently trading against the Pound in the region of 0.6873, is trading against the Euro in the region of 0.8084 and is trading against the US Dollar in the region of 1.0429

New Zealand Dollar

The ‘Kiwi’ largely retained gains made on the back of stronger-than-forecast GDP figures for New Zealand, further bolstered by a private report which revealed an increase in job advertisements in the nation. Demand for the New Zealand Dollar was tempered however as risk-aversion grew.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5480, is trading against the Euro in the region of 0.6422 and is trading against the US Dollar in the region of 0.8329

Canadian Dollar

Positive Canadian retail figures allowed the Canadian Dollar to achieve a week-high against its American counterpart. The ‘Loonie’ also benefited from Finance Minister Jim Flaherty’s pledge to eliminate the country’s deficit by 2015 and positive US jobless claims figures.

The Canadian Dollar is presently trading against the Pound in the region of 0.6420, is trading against the Euro in the region of 0.7549 and is trading against the US Dollar in the region of 0.9746

These exchange rates were correct as of 9:22 am

Richard Martin
This post was written by
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.