Yesterday top ratings agency Standard & Poor cut Spain’s sovereign-debt rating. This move intensified the economic and political concerns which have dogged the struggling Eurozone nation in recent weeks and led to the Pound advancing against the Euro for a third consecutive day, although the British currency remained little changed against the US Dollar. Over the past six months Sterling has strengthened by 0.4 per cent whilst its European cousin has weakened by 2.5 per cent.
The Pound is presently trading against the Euro in the region of 1.2439 and is trading against the US Dollar in the region of 1.6010
As investor appetite for riskier assets strengthened the safe-haven US Dollar recorded losses against several of its main trading partners. Significant market movement can be expected today following the release of some key pieces of US data. The International Trade Balance for August, September’s Import/Export Prices and this week’s Initial Jobless claims. If the latter piece of data confirms the progression in the labour market hinted at by last week’s non-farm payrolls report the ‘Greenback’ could enjoy a more bullish relationship with its peers.
The US Dollar is presently trading against the Pound in the region of 0.6243 and is trading against the Euro in the region of 0.7768
After Standard & Poor slashed Spain’s credit ranking by two levels (from BBB+ to BBB-) the common currency dropped to its lowest level against the US Dollar for almost two weeks. Not since October 1st has the Euro been around the $1.2825 mark. Dropping Spain’s rating to just above junk status and giving the nation a negative outlook made investors lose their appetite for the Euro. This uneasiness hasn’t been helped by Spain continuing to resist making a decision regarding a bailout. Meanwhile positive Australian news saw the risk-sensitive Aussie enjoy a rebound. Some economists are predicting that continuing Eurozone instability could see the Australian Dollar become the more attractive risk asset to investors.
The Euro is presently trading against the Pound in the region of 0.8036 and is trading against the US Dollar in the region of 1.2875
Despite the Australian jobless rate hitting its highest level for 2 years the ‘Aussie’ was able to make gains after a report showed that more people entered employment – and particularly full-time employment – in September than expected. Despite economists predicting an employment increase of just 5,000 the actual number released by the statistics bureau was 14,500. The Australian currency was able to brush a week high, but demand for the Down-Under Dollar was limited by the lowering of Spain’s credit rating.
The Australian Dollar is presently trading against the Pound in the region of 0.6414, is trading against the Euro in the region of 0.7983 and is trading against the US Dollar in the region of 1.0277
New Zealand Dollar
The New Zealand Dollar responded to Australia’s better-than-expected employment figures by falling against the ‘Aussie’. News that more people than predicted found employment in New Zealand’s biggest trading partner pushed the ‘Kiwi’ from 79.84 Australian Cents to 79.53. The New Zealand Dollar also recorded advances against the Euro but moved little against the British Pound and Japanese Yen. Following the release of a report which showed New Zealand’s manufacturing activity contracted for a fourth month, the South-Pacific currency remained relatively unchanged. Consumer confidence in New Zealand is also reported to have dropped, but a separate report showed that the nation’s food prices fell in September by 0.9 per cent. With little in the way of pertinent New Zealand data on the cards today any volatility in the ‘Kiwi’ will probably be the result of Eurozone developments.
The New Zealand Dollar is presently trading against the Pound in the region of 0.5103, is trading against the Euro in the region of 0.6332 and is trading against the US Dollar in the region of 0.8187
In light of growing concerns regarding global economic growth, during trading yesterday the ‘Loonie’ sunk to its lowest level for four days against its US rival. The International Monetary Fund commented that confidence in recovery was ‘very fragile’ which compounded weakening commodity prices and global stock markets and contributed to the resource-linked Canadian currency adopting a bearish relationship with its peers.
The Canadian Dollar is presently trading against the Pound in the region of 0.6371, is trading against the Euro in the region of 0.7927 and is trading against the US Dollar in the region of 1.0212