Exchange Rate Outlook: Quiet day expected on lack of data releases


Pound Sterling

The Pound dropped for a third day straight against the Euro after mortgage approvals in the UK fell from the previous month in November. Against the US Dollar, Sterling was little moved. Today sees little in the way of data releases so trading is expected to relatively muted. Sterling could be impacted later in the session as Bank of England Governor Mark Carney and other policy makers testify to parliament’s Treasury committee. The Bank governor is expected to explain the quarterly inflation report and the bank’s new economic forecasts.

Tomorrow sees the release of data which is expected to show that the UK economy expanded in the third quarter.

GBP/EUR is trading in the region of 1.1944 and GBP/USD is trading in the region of 1.6189

US Dollar

The US Dollar fell against the Japanese Yen as investors consolidated their positions following the large gains achieved over the past few days. Against the Pound the ‘Greenback’ is little moved as investors await the release of consumer confidence and housing data later in the session. The US currency is still receiving some support from expectations that the Federal Reserve will taper its monetary easing programme soon.

USD/GBP is trading in the region of 0.6176 and USD/EUR is trading in the region of 0.7377


The Euro dropped later in yesterday’s session after European Central Bank governing council member Ardo Hansson said that the Bank is read to make further cuts to interest rates and is ‘technically ready’ to implement negative deposit rates. The currency recovered some ground early today but is likely to soften as data out of Finland and Italy look likely to disappoint.

EUR/GBP is trading in the region of 0.8372 and EUR/USD is trading in the region of 1.3554

Australian Dollar

The ‘Aussie’ resumed its decline against its peers after briefly finding support earlier in the session. The currency firmed briefly after the Reserve Bank of Australia’s deputy governor declined to add to the banks recent comments regarding the overvaluing of the ‘Aussie’. The currency then resumed its decline as bets that the RBA will take steps to weaken it further increased.

AUD/GBP is trading in the region of 0.5658, AUD/EUR is trading in the region of 0.6759 and AUD/USD is trading in the region of 0.9161

New Zealand Dollar

The ‘Kiwi’ is little moved against its peers as investors await the results of data which isn’t due for release until late this evening. The nation’s trade balance data is expected to show that the nation’s trade deficit narrowed in October as exports increased. Construction data is also expected to show an increase.

NZD/GBP is trading in the region of 0.5079, NZD/EUR is trading in the region of 0.6067 and NZD/USD is trading in the region of 0.8224

Canadian Dollar

The Canadian Dollar fell to a four-month low against the US Dollar and remained lower against the Pound and other major currencies as the price of oil, Canada’s biggest export, continued to fall following the deal struck between Iran and global powers. The extra oil output from Iran is expected to bolster global supplies and push the price of the commodity downwards.

CAD/GBP is trading in the region of 0.5857, CAD/EUR is trading in the region of 0.6996 and CAD/USD is trading in the region of 0.9483

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