The Pound was weaker against the Euro on expectations that the Bank of England will leave interest rates unchanged at 0.5% and will be more dovish due to a run of soft UK data releases. Economists are forecasting that the majority of BoE policy makers voted in favour of keeping rates unchanged.
The US Dollar fell close to a two-week low against the Euro and softened against the Pound after the Federal Reserve’s policy minutes dampened demand for the currency. The dovish minutes showed that the FOMC argued over the rate-hike rhetoric being adopted, with some claiming that a rise is not yet appropriate. The report also showed that the US central bank cut its growth outlook due to the higher Dollar and concerns over global weakness.
The Euro advanced against the US Dollar due to the dovish Federal Reserve minutes but remains under pressure from data released earlier in the week. Reports showed that German factory orders and industrial production fell sharply, increasing concerns that the region is heading towards a recession.
The ‘Aussie’ advanced despite the release of negative jobs data. The Australian Bureau of Statistics said the unemployment rate stood at 6.1% in September with the number of employed people falling by 29,700 and the participation rate easing to 64.5%. Despite being a worse-than-forecast report, traders responded positively as it was deemed to be more accurate than the preceding month’s data. The ‘Aussie’ also found support from the dovish Federal Reserve minutes.
New Zealand Dollar
The New Zealand Dollar followed its Australian counterpart higher on the back of the dovish US Federal Reserve Minutes. The minutes surprised traders as they showed that Fed policy makers are concerned over the strength of the ‘Greenback’.
The ‘Loonie’ briefly rose on the back of the dovish Fed minutes. The Canadian Dollar then softened again due to pressure from declining commodity prices. The nation’s biggest export of Crude Oil fell to a fresh 18-month low after the US produced an extra 5.1 million barrels last week.
South African Rand
The Rand strengthened alongside most other commodity and emerging-market currencies on the back of the Federal Reserve minutes. The Rand could make further gains if the session Mining Production and Manufacturing Production data comes in positively.
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