The Pound was holding above the 1.27 level against the Euro and was firmer against the US Dollar as the currency continued to find support from the result of last week’s Scottish Referendum vote. With not much in the way of market moving data due for the Pound this week, the currency will be vulnerable to events from elsewhere. An escalation in the conflict against the Islamic State could put some pressure on Sterling as it will create some risk aversion.
The US Dollar eased against its major peers after disappointing home sales data caused investors to embark on a bout of profit taking. The currency is likely to experience movement later in the session due to the release of the latest Markit Manufacturing PMI and Chain Store Sales data.
The Euro regained some ground against the US Dollar and was edging higher against other peers after European Central Bank (ECB) President Mario Draghi said that he would not sit back and wait for newly announced stimulus measures to take effect. The ECB President’s rhetoric led to the single currency edging higher.
The ‘Aussie’ advanced modestly against the US Dollar and regained ground against the Pound after it found support from the release of positive Chinese manufacturing data. Data released by HSBC/Markit showed that China’s Purchasing Managers Index (PMI) rose to a reading of 50.5 from the previous figure of 50.2.
New Zealand Dollar
The New Zealand Dollar also made gains against its peers due to the positive data out of China. China is New Zealand’s second largest trading partner so any signs of improvement in the Asian nation’s economy have a positive impact on the ‘Kiwi’.
The ‘Loonie’ remained under pressure after the Deputy Governor of the Bank of Canada said that the nation’s economy still needs an extra boost of monetary stimulus if the recovery is to stay on track. It regained some ground however after crude oil prices increased in response to the Chinese PMI data.
South African Rand
The Rand advanced alongside other emerging-market currencies as the US Dollar was softened overnight by soft home sales data and as positive data out of China offered support.
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