Exchange Rate Outlook: ‘Cyclone’ set to hit the Australian Dollar

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Pound Sterling

The Pound pushed beyond the 1.20 mark against the Euro after data showed that UK house prices rose for an 11th consecutive month in December. Against the US Dollar, Sterling remained stronger after pushing beyond its highest level in two years last Friday.

GBP/EUR is trading in the region of 1.1997 and GBP/USD is trading in the region of 1.6487

US Dollar

The US Dollar  is on track to make a yearly gain against several of its peers and touched a five-year high against the Japanese Yen as optimism rises that the US Federal Reserve will end its monetary easing programme by the end of 2014 as the world’s largest economy continues to recover strongly.

USD/GBP is trading in the region of 0.6065 and USD/EUR is trading in the region of 0.7278

Euro

The Euro is weaker against the Pound but little moved against other peers in muted trading. The currency found support from data released early in the session which showed that retail sales in Spain improved by 1.9% on a yearly basis, smashing forecasts of a figure of -1.57%.

EUR/GBP is trading in the region of 0.8333 and EUR/USD is trading in the region of 1.3739

Australian Dollar

The ‘Aussie’ fell against its peers as iron ore production was hit as mining in the northwest of the country shutdown ahead of the arrival of Tropical Cyclone Christine. The currency is also on track to make its biggest yearly loss since 2008 against the US Dollar and is expected to make a multi-year loss against the Pound.

AUD/GBP is trading in the region of 0.5372, AUD/EUR is trading in the region of 0.6444 and AUD/USD is trading in the region of 0.8856

New Zealand Dollar

The ‘Kiwi’ is mixed against its peers as it suffers from a lack of new data releases over the Christmas holidays and the muted trading in the markets. The kiwi will probably drift lower against the Pound and US Dollar until trading picks up after the holiday period.

NZD/GBP is trading in the region of 0.4953; NZD/EUR is trading in the region of 0.5939 and NZD/USD is trading in the region of 0.8161

Canadian Dollar

With no Canadian economic data on tap until the New Year and the US calendar similarly sparse, investors are focusing on the longer-term trends for the ‘Loonie’.

CAD/GBP is trading in the region of 0.5664, CAD/EUR is trading in the region of 0.6794 and CAD/USD is trading in the region of 0.9336

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.