The Pound advanced against most of its peers as Scotland took to the polls to decide the fate of the United Kingdom. A victory for the ‘No’ campaign is expected as several polls showed a lead for the pro-union side. The currency is likely to experience choppy trading throughout the session as markets remain jittery until the outcome of the vote is known. Retail sales data is also due for release but that is likely to take a backseat to events in Scotland.
The US Dollar strengthened against several major peers after Fed policy makers increased their target rate forecast. The central bank also announced a tapering of its monthly bond-buying programme, staying on course to end the programme by October. Further gains were restrained somewhat after the bank said that interest rates will remain near 0% for a considerable time.
The Euro looks set to be influenced by events in the UK and elsewhere today due to a lack of domestic market moving economic data. The Euro declined against the Pound as the markets were cautious over the Scottish referendum vote.
The ‘Aussie’ was little moved against the US Dollar and weakened against the Pound after the US Federal Reserve lowered its monthly asset-purchasing programme. The Fed cut its monthly asset purchase program by another $10 billion, staying on track to finish next month.
New Zealand Dollar
The New Zealand Dollar edged higher against several major peers due to the release of better than forecast GDP data. The report showed that New Zealand’s economy expanded by 0.7%, beating forecasts for 0.6% and adding to the 1% rise seen in the first quarter of the year.
The ‘Loonie’ fell more than a quarter of a cent against its US relation on Wednesday due to indications that the U.S. Federal Reserve remains in no hurry to raise record low interest rates. Against the Pound, the Canadian Dollar was little changed as the markets await the outcome of the Scottish referendum.
South African Rand
The Rand firmed against the US Dollar early on Thursday before the South African Reserve Bank’s fifth interest rate decision of the year. Some market players are expecting a hike in rates. The majority, however, believe that a string of weak data reports will be enough to deter the bank from changing rates.
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