Yesterday Sterling dropped to a two month low against the US Dollar as investors remain cautious prior to tomorrow’s Bank of England Inflation Report. After the government announced that it would use profits from the central banks bond purchasing programme to slim its short-term borrowing at the end of last week the Pound has been under selling pressure. Although the UK economy posted solid third-quarter growth many industry experts are concerned that underlying weakness remains, keeping investors wary. UK data released this week – including inflation figures today – should give an indication of how the fourth quarter is progressing.
The Pound is presently trading against the Euro in the region of 1.2515 and is trading against the US Dollar in the region of 1.5871
The US Dollar held on to the majority of the gains secured last week on the back of continued risk aversion. Although yesterday’s bank holiday kept movement tempered further European concerns kept investors attracted to safe haven assets like the US Dollar and Japanese Yen. The US Federal Budget will be announced this evening but with little other US news scheduled movement in the ‘Greenback’ will most likely be caused by developments in the Eurozone. Of particular interest will be the German ZEW Economic Sentiment figures for November.
The US Dollar is presently trading against the Pound in the region of 0.6300 and is trading against the Euro in the region of 0.7885
Although Eurozone finance ministers have agreed to give Greece more time to meet its fiscal targets, disagreement remains regarding when the struggling nation will receive their next aid instalment. Luxemburg Prime Minister Jean Claude Junker has stated that ministers will gather again on the 20th of November for an ‘extraordinary’ meeting concerning Greece, but the further postponement of action caused the Euro to drop against the majority of its competitors and hit a two-month low against the US Dollar. Today investors will be concerning themselves with the German ZEW economic sentiment figures for November. Additional signs that the largest economy in the currency bloc is deteriorating could push the Euro lower.
The Euro is presently trading against the Pound in the region of 0.7991 and is trading against the US Dollar in the region of 1.2674
The Australian Dollar fell back from gains recorded yesterday after riskier assets suffered the affects of negative developments in the Eurozone. Although it gained against a broadly weakening Pound the ‘Aussie’ was pushed lower against other rivals after statistics revealed a weakening in Australian business confidence. If today yields more signs that the Eurozone is headed for recession the Australian Dollar could continue to lose ground against its safe-haven peers.
The Australian Dollar is presently trading against the Pound in the region of 0.6560, is trading against the Euro in the region of 0.8209 and is trading against the US Dollar in the region of 1.0407
New Zealand Dollar
With investors jittery after the Greek talks – in which the indebted nation was told it would have to bridge a funding gap of 32.6 billion Euros unaided – Asian equity markets declined, but the New Zealand Dollar was able to remain largely unchanged. Meanwhile, a decline in Australian business confidence helped the ‘Kiwi’ advance on its South Pacific rival. This evening will see the release of New Zealand third quarter Retail sales but any fluctuations in the ‘Kiwi’ prior to this are likely to be the result of European developments.
The New Zealand Dollar is presently trading against the Pound in the region of 0.5145, is trading against the Euro in the region of 0.6441 and is trading against the US Dollar in the region of 0.8170
Although the Canadian Dollar ended trade yesterday slightly higher than it began the weight of Eurozone concerns pushed the ‘Loonie’ below parity with the US Dollar once again. Unless positive developments occur regarding the European crisis or the US fiscal cliff the Canadian Dollar could remain hovering near parity for the foreseeable future.
The Canadian Dollar is presently trading against the Pound in the region of 0.6293, is trading against the Euro in the region of 0.7886 and is trading against the US Dollar in the region of 0.9988