Euro broadly weakening

Pound Sterling

For a fourth consecutive day the British Pound was able to advance against a broadly weakening Euro. During early trade Sterling achieved 79.86 pence against its European rival, the strongest level for over a month. Against the US Dollar the Pound remained largely unchanged. Should risk-appetite be whetted by the outcome of the US presidential election Sterling could benefit but it could also fall against other risky assets like the Euro if they should similarly advance. Of interest to investors today is the UK Markit/CIPS Services PMI for October which is forecast to come in below the figure recorded for September.

The Pound is presently trading against the Euro in the region of 1.2509 and is trading against the US Dollar in the region of 1.5991

US Dollar

The US Dollar was buoyed on Friday as better-than-forecast Non-Farm Payrolls figures hinted at US economic recovery gathering speed. The ‘Greenback’ recorded gains against several of its main competitors, making particularly notable advances against the Euro. Investors are now waiting for the outcome of tomorrow’s presidential election. If Mitt Romney manages to pip President Barak Obama to the post economists are foreseeing heightened demand for riskier assets. Also of interest today is the release of ISM Non-Manufacturing PMI for the US.

The US Dollar is presently trading against the Pound in the region of 0.6241 and is trading against the Euro in the region of 0.7819

Euro

The Euro turned bearish as concerns mount that sorely needed bailout funds will elude Greece. With dissention dogging the Greek government it appears increasingly unlikely that the struggling nation will be granted the fiscal extension it requires. Consequently, the common currency dipped to an almost two-month low against the US Dollar and posted a fourth day of losses against the British Pound. Demand for riskier assets like the Euro was also limited as investors hold off prior to the integral results of the US presidential election.

The Euro is presently trading against the Pound in the region of 0.7996 and is trading against the US Dollar in the region of 1.2790

Australian Dollar

Following the release of reports which showed the Australian trade deficit to be narrower than expected and retail sales gains in September exceeding forecasts the Australian Dollar firmed. The ‘Aussie’ posted gains against all of its major trading partners; although demand was limited as investors await the outcome of the Reserve Bank of Australia’s policy meeting and the US presidential election tomorrow.

The Australian Dollar is presently trading against the Pound in the region of 0.6471, is trading against the Euro in the region of 0.8071 and is trading against the US Dollar in the region of 1.0356

New Zealand Dollar

The New Zealand Dollar mirrored the rise of its South Pacific counterpart, trading higher against its rivals on the back of better-than-expected Australian economic data. The ‘Kiwi’ made particularly impressive gains against the British Pound and US Dollar but whether or not the currency will be able to hold on to them largely depends on the results of the US presidential election and Australian central bank meeting. If Romney ousts President Obama interest in risk-taking could be heighted and assets like the New Zealand Dollar could benefit.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5146, is trading against the Euro in the region of 0.6434 and is trading against the US Dollar in the region of 0.8244

Canadian Dollar

Strong signs of improvement in the US economy ensured that the Canadian Dollar experienced positive movement by the close of trade last week. The ‘Loonie’ rose against its main counterparts and hit a week’s high against the US Dollar, despite the ‘Greenback’ broadly strengthening. As one of Canada’s largest trading partner’s gears up for a potential switch of power significant volatility in the nation’s currency could be ahead. The outcome of the US presidential elections will likely cause ‘Loonie’ fluctuations as the week progresses.

The Canadian Dollar is presently trading against the Pound in the region of 0.6279, is trading against the Euro in the region of 0.7855 and is trading against the US Dollar in the region of 1.0042

 

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.