Euro Sheds Gains Ahead of ECB Decision and Italian Confidence Vote

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Pound Sterling

Although yesterday’s UK manufacturing PMI report showed that the sector expanded by less than forecast, the Pound still advanced on the Euro and US Dollar in the hours following its publication. Today the main domestic driver of Sterling movement will be UK construction PMI figures, although political developments in the US and Eurozone could also have a significant impact on the GBP/EUR and GBP/USD pairings.

GBP/EUR is trading in the region of 1.1979 and GBP/USD is trading in the region of 1.6202

US Dollar

Although the ‘Greenback’ posted widespread declines as the partial government shutdown lowered the odds of the Federal Reserve tapering stimulus this year, the expectation that this week’s non-farm payrolls report will show improvement helped the US Dollar recoup losses overnight. Today’s US ADP employment change data, due out at 13:15, could inspire ‘Greenback’ fluctuations.

USD/GBP is trading in the region of 0.6179 and USD/EUR is trading in the region of 0.7399

Euro

After rallying against several of its most traded peers yesterday as the unemployment rate in the Eurozone declined unexpectedly, the Euro softened as the local session opened and investors considered the upcoming European Central Bank rate decision. While the central bank is forecast to hold rates at record lows, the tone of President Mario Draghi’s accompanying statement and any references to a banking system cash injection will be of particular interest. Italian political developments could also inspire Euro volatility.

EUR/GBP is trading in the region of 0.8348 and EUR/USD is trading in the region of 1.3513

Australian Dollar

In the aftermath of the Reserve Bank of Australia’s rate decision – and the publication of stronger-than-expected domestic retail sales figures – the ‘Aussie’ advanced on rivals like the US Dollar. However, with reports showing a larger-than-predicted trade deficit and a disappointing advance in building approvals, the Australian Dollar pared gains.

AUD/GBP is trading in the region of 0.5081, AUD/EUR is trading in the region of 0.6908 and AUD/USD is trading in the region of 0.9338

New Zealand Dollar

During Australasian trading the ‘Kiwi’ extended its decline against the ‘Greenback’ as the assistant Governor of the Reserve Bank of New Zealand highlighted a decline in the nation’s productivity growth. Hopes for a strong US non-farm payrolls report on Friday also piled the pressure on the NZD/USD pairing.

NZD/GBP is trading in the region of 0.5081, NZD/EUR is trading in the region of 0.6069 and NZD/USD is trading in the region of 0.8210

Canadian Dollar

With the partial federal shutdown in the US dampening Canada’s trade and growth prospects the ‘Loonie’ tumbled against its peers, posting notable declines against fellow commodity-driven currencies like the ‘Aussie’. US developments are likely to be the main cause of Canadian Dollar movement as the day progresses.

CAD/GBP is trading in the region of 0.5962, CAD/EUR is trading in the region of 0.7143 and CAD/USD is trading in the region of 0.9660

These exchange rates were correct as of 09:20 am

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.