Euro at 21-month high against Yen

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Pound Sterling

Following on from Friday’s disappointing 4Q GDP figures for the UK the Pound has dropped against the Euro for a third consecutive day. Evidence of faltering UK house prices pushed Sterling to a 13-month low against the common currency and a five-month low against a broadly firming US Dollar. Low volatility can be expected this morning due to a lack of influential British data but movement could follow this afternoon’s release of US Durable Goods Orders.

The Pound is presently trading against the Euro in the region of 1.1714 and is trading against the US Dollar in the region of 1.5737

US Dollar

Although growing optimism regarding the economic recovery of the Eurozone resulted in increased risk taking in the marketplace – and consequently the US Dollar declining against several of its higher-yielding peers – the ‘Greenback’ was able to hit a 2 ½ year high against safe-haven rival the Japanese Yen on Friday. This morning the American currency has broadly strengthened prior to the release of US Durable Goods orders data, which is expected to show further signs of stabilisation in the world’s largest economy. Investors will also be watching out for tomorrow’s US Consumer Confidence figures.

The US Dollar is presently trading against the Pound in the region of 0.6356 and is trading against the Euro in the region of 0.7442

Euro

As European markets opened for the morning the Euro continued to trade in the region of an 11-month high against the US Dollar amid improved sentiment regarding Eurozone economic recovery. With the situation in Germany progressing positively and European Banks repaying more of their ECB loans than anticipated the common currency was able to hit a 13-month high against the British Pound and a 21-month high against the Japanese Yen. Movement in the Euro will be limited today due to a lack of volatile economic news for the 17-nation currency bloc but could occur in response to US Durable Goods Orders figures.

The Euro is presently trading against the Pound in the region of 0.8537 and is trading against the US Dollar in the region of 1.3430

Australian Dollar

Improved European sentiment and heavy selling of the Australian Dollar saw the ‘Aussie’ fall to a three-week low against its common currency counterpart. With industry experts beginning to expect that the Australian economy will continue to show weaknesses this situation could continue in the days ahead. Australian Business Confidence figures will be the main point of interest tomorrow.

The Australian Dollar is presently trading against the Pound in the region of 0.6605, is trading against the Euro in the region of 0.7739 and is trading against the US Dollar in the region of 1.0397

New Zealand Dollar

The New Zealand Dollar traded lower at the close of last week on the back of risk aversion triggered by developments in North Korea, and the ‘Kiwi’ continues to hold a weaker position against the Euro this morning. The optimism inspired by upbeat European data releases has pushed the common currency higher against its South Pacific currency rival, but with markets closed for a national holiday additional movement in the New Zealand Dollar will be limited today.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5304, is trading against the Euro in the region of 0.6189 and is trading against the US Dollar in the region of 0.8315

Canadian Dollar

After the Bank of Canada announced that it had been mistaken in the strength of the nation’s economic recovery, and that low interest/inflation rates would continue for the foreseeable future, the Canadian Dollar dropped below parity with its US counterpart. The Canadian central bank’s rate has held at 1 per cent for two years and the news that this situation wouldn’t be changing soon sent the ‘Loonie’ to a six-month low against the ‘Greenback’. With economic news for the nation thin on the ground until the end of the week fluctuations in the Canadian Dollar are most likely to occur in response to global economic developments.

The Canadian Dollar is presently trading against the Pound in the region of 0.6294, is trading against the Euro in the region of 0.7373 and is trading against the US Dollar in the region of 0.9905

 

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.