Euro gains on US Dollar for sixth month

foreign_exchange_rates

Pound Sterling

Although the Pound managed to strengthen against the Euro yesterday following a report which revealed that German retail sales decreased more than forecast, the expectation of disappointing UK manufacturing data later saw the British currency fall close to a 13 month low against its European rival. Economists expect the gauge of factory output compiled by Markit Economics and the Charted Institute of Purchasing and Supply to have dropped from 51.4 to 51, perilously close to the 50 mark which separates growth from contraction. Prior to the data release the Pound remains little changed against the US Dollar.

The Pound is presently trading against the Euro in the region of 1.1636 and is trading against the US Dollar in the region of 1.5848

US Dollar

Worse-than forecast Eurozone data allowed the US Dollar to post brief gains against several of its more risky currency rivals. Concerns that today’s UK manufacturing data might disappoint also led to Sterling falling 60 pips against the ‘Greenback’. Significant volatility can be expected to occur today following the release of the US Non-Farm Employment Change figure – a key economic indicator. Economists are expecting an improvement from last month’s level and if this proves accurate the Dollar could benefit.

The US Dollar is presently trading against the Pound in the region of 0.6307 and is trading against the Euro in the region of 0.7345

Euro

The current strength of the Euro led to the currency posting a sixth consecutive month of gains against the US Dollar yesterday, its best performance against the American currency for almost ten years. The Euro also advanced against the Pound, rebounding from modest losses sustained when German retail sales came in lower-than-forecast. The Euro could continue to trade higher in the hours ahead as this morning’s German manufacturing PMI revealed an unexpected rise. Investors will also be paying attention to today’s Eurozone CPI estimate and unemployment rate figures.

The Euro is presently trading against the Pound in the region of 0.8599 and is trading against the US Dollar in the region of 1.3614

Australian Dollar

Weaker than hoped for Chinese manufacturing data reduced confidence in Australia’s trade prospects, causing the ‘Aussie’ to decline against several of its most traded rivals. The Australian Dollar declined most notably against its New Zealand counterpart after the latter currency was boosted by comments made by the Reserve Bank of New Zealand Governor Graeme Wheeler. An absence of home-grown economic news means that movement in the Australian Dollar is likely to be the result of global economic developments.

The Australian Dollar is presently trading against the Pound in the region of 0.6556, is trading against the Euro in the region of 0.7606 and is trading against the US Dollar in the region of 1.0372

New Zealand Dollar

Despite a worse-than-forecast Chinese manufacturing report weighing on the currency, the ‘Kiwi’ was still able to brush a 17-month high against its Australian rival. The New Zealand Dollar’s strength occurred as a result of comments made by the governor of the nation’s central bank. After announcing that the benchmark interest rate would hold at 2.5 per cent Graeme Wheeler asserted that the South Pacific nation must find a way of reducing the budget deficit, or else face increased interest rates. The ‘Kiwi’ also gained on the US Dollar and Japanese Yen.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5306, is trading against the Euro in the region of 0.6178 and is trading against the US Dollar in the region of 0.8406

Canadian Dollar

For the first time in over a week the Canadian Dollar was trading above parity with its American rival. The ‘Loonie’ strengthened against several of its main counterparts after an unexpectedly strong Canadian GDP figure. Although economists forecast growth of 0.2 per cent the actual result was 0.3 per cent, and this modest improvement saw the Canadian Dollar climb by 0.4 per cent against the ‘Greenback’.

The Canadian Dollar is presently trading against the Pound in the region of 0.6322, is trading against the Euro in the region of 0.7347 and is trading against the US Dollar in the region of 1.0026

 

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.