The Pound was softer against the US Dollar and Euro on Friday as data showed that UK house prices grew at their slowest pace in 10 months in September. The softer data adds to concerns that the UK economic recovery is slowing. Thursday’s Bank of England interest rate decision also weighed as investors bet that the minutes for the meeting would show that policy makers would not vote in favour of a rate increase. Sterling could soften further if the day’s Balance of Trade data comes in worse than expected.
The US Dollar firmed against its major peers following the release of stronger than forecast US Jobless Claims data. The report showed that the number of Americans filing for unemployment benefits in the week ending October 4 fell by 1,000 to 287,000 from the previous week’s figure of 288,000. The currency could experience volatility in the evening from the Monthly Budget Statement.
On Thursday the Euro declined for the first time in four days against the US Dollar but held onto gains against the Pound after European Central Bank President Mario Draghi pledged to expand stimulus measures and called for more reforms across the Eurozone. Fears are building that Germany and the wider region are heading towards recession.
During Australasian trading the ‘Aussie’ declined further against the US Dollar and other peers on the back of weak housing finance data. The report showed that housing finance in Australia fell by 0.9% in August, well below the 0.1% rise forecast by economists.
New Zealand Dollar
The New Zealand Dollar was weaker against several peers as demand for riskier asset waned on concerns over the state of the global economy. Falling dairy prices and fears for the Chinese economy are weighing upon the ‘Kiwi’.
The ‘Loonie’ fell against the Pound and other major rivals due to the slide in oil prices and as the markets await the release of the latest Canadian employment data. With oil being Canada’s most exported commodity, the nation’s economy is negatively impacted by falling prices. Also weighing on the currency were comments made by the International Monetary Fund.
South African Rand
The Rand followed other commodity and emerging-market currencies lower as investors favoured the safe-haven currencies of the Swiss Franc and Japanese Yen on the back of comments made by the IMF regarding the state of the global economy.
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