The Pound softened against the US Dollar as investors raised their bets that the UK parliament will vote in favour of committing the nation to war in Iraq. All three major party leaders are expected to back the RAF launching airstrikes against the Islamic State. Further losses were restrained after Bank of England Governor Mark Carney said that interest rate hikes are getting closer.
The US Dollar advanced against most of its major peers after the Federal Reserve warned the markets that interest rate hikes could occur sooner than initially expected. Another solid US jobs report also increased support for the ‘Greenback’.
The Euro was holding steady against the US Dollar but remained close to its lowest level in two years as poor German consumer climate data weighed upon the single currency. The data added to concerns over the health of the region. The GFK Consumer Confidence report showed that confidence dropped from a reading of 8.6 to 8.3.
The ‘Aussie’ continued to soften against its major peers after it reflected gains by the US Dollar and felt the impact of falling commodity prices and concerns over a weakening Chinese economy. Also weighing upon the currency were comments made by the Reserve Bank of Australia. The RBA asserted that it could intervene in the nation’s property market in order to cool prices.
New Zealand Dollar
The New Zealand Dollar advanced strongly against the Euro overnight after a run of weak economic data releases increased speculation that the European Central Bank may introduce new monetary stimulus measures. The currency’s performance against several of its other rivals was less impressive as the Reserve Bank of New Zealand’s hints regarding currency market intervention took a toll.
The ‘Loonie’ was softer against several major peers due to the increasing strength of the US Dollar. With the latest US GDP Growth data due for release later in the session, we can expect the CAD/USD exchange rate to fall further.
South African Rand
The Rand weakened to its worst level in eight months against the US Dollar but managed to advance against the Pound as concerns mounted that the UK will vote in favour of taking military action in Iraq. The South African currency came under pressure after Producer Price Inflation slowed more than expected in August.
Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.