‘Greenback’ hit 2 ½ year high against Yen

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Pound Sterling

The Pound begins the week trading lower following the release of a further sign that the UK economy contracted in the fourth quarter of 2012 and may continue to contract into 2013. According to accountancy firm BDO LLP a gauge of UK output and an index of business confidence both declined in December. In the week ahead investors will be watching out for any additional indications of economic faltering in the UK. If fears of a triple-dip recession continue to be fuelled the Pound could drop significantly against its major peers.

The Pound is presently trading against the Euro in the region of 1.2074 and is trading against the US Dollar in the region of 1.6128

US Dollar

As markets reopen for the start of another week the safe-haven US Dollar’s bearish relationship with its riskier peers persists as optimism surrounding Eurozone economic recovery continues to grow. However, the ‘Greenback’ was able to advance to a 2 ½ year high against the Japanese Yen on the back of speculation regarding further monetary easing in Japan. Notable fluctuations in the American currency are expected to occur this week in response to several key US economic indicators, including today’s speech by Federal Reserve chairman Ben Bernanke and tomorrow’s retail sales figures.

The US Dollar is presently trading against the Pound in the region of 0.6200 and is trading against the Euro in the region of 0.7474

Euro

At the close of last week the Euro was able to advance on the majority of its most traded rivals following positive growth expectations for the 17 nation currency block. The common currency recorded particularly notable gains against the British Pound and US Dollar, hitting an eight-month high against the latter. Further Euro advances could be made if this week’s data, which includes today’s industrial production figures for the Eurozone, meet or exceed expectations.

The Euro is presently trading against the Pound in the region of 0.8285 and is trading against the US Dollar in the region of 1.3357

Australian Dollar

In the past few hours greater appetite for Asian stocks has bolstered higher-yielding currencies like the Australian Dollar. The ‘Aussie’ posted particular gains against its safe-haven counterparts the US Dollar and Japanese Yen, rising by 0.2 per cent and 0.6 per cent respectively. However, the South Pacific currency declined against the New Zealand Dollar following disappointing Australian housing and jobs data. Of interest in the days ahead are tomorrow’s Australian Westpac consumer confidence figures as well as developments in Japan.

The Australian Dollar is presently trading against the Pound in the region of 0.6555, is trading against the Euro in the region of 0.7880 and is trading against the US Dollar in the region of 1.0567

New Zealand Dollar

Following the release of a report which showed an increase in New Zealand’s retail card spending the nation’s currency advanced against all of its main competitors. The ‘Kiwi’ jumped by 0.5 per cent against the US Dollar and 0.9 per cent against the Japanese Yen. It was also able to gain on its neighbouring currency the ‘Aussie’ after an unexpected decline in Australian home-loan approvals and an increase in job advertisements. A lack of economic news for New Zealand in the days ahead means that volatility in the currency is likely to be the result of economic developments in Asia, Australia and the US.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5213, is trading against the Euro in the region of 0.6292 and is trading against the US Dollar in the region of 0.8418

Canadian Dollar

Towards the close of last week the Canadian Dollar strengthened on the back of better-than-forecast Chinese export figures and the European Central Bank’s decision to hold rates. This week ‘Loonie’ volatility could follow the release of Canadian economic data, such as today’s business outlook future sales figures, as well as resulting from developments in the US and Eurozone.

The Canadian Dollar is presently trading against the Pound in the region of 0.6306, is trading against the Euro in the region of 0.7614 and is trading against the US Dollar in the region of 1.0168

 

Richard Martin
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After working in business development for a major UK currency brokers for several years, Richard left Britain to help set up the company’s Australian office and now lives and works in Queensland; making the most of his new Down-Under lifestyle.