‘Loonie’ dropped to parity

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Pound Sterling

After rising against the Euro on the back of better-than-expected jobless claims data the Pound later declined, weakening to 84.24 pence. A slight upward correction allowed the British currency to begin trading today in the region of 83.98, but with Prime Minister David Cameron set to face tough questions regarding his decision to allow the UK to hold a referendum on EU membership and Eurozone manufacturing PMI/UK housing data due out this morning, additional movement can be expected.

The Pound is presently trading against the Euro in the region of 1.1888 and is trading against the US Dollar in the region of 1.5843

US Dollar

Better-than-forecast unemployment data for the UK, and a sharp rise in consumer confidence in the Eurozone, led to a bout of risk taking in the marketplace yesterday, causing the safe-haven US Dollar to fall against several of its higher yielding rivals. The US unemployment claims figure could trigger ‘Greenback’ fluctuations today as analysts are expecting it to reveal an increased level of unemployment from last week. If these forecasts prove accurate fears of a setback in US economic recovery could lead investors to turn to lower-risk assets like the US Dollar. Developments in the Eurozone will also be of interest.

The US Dollar is presently trading against the Pound in the region of 0.6312 and is trading against the Euro in the region of 0.7506

Euro

The Euro could be heading for another bout of advances today as yesterday’s significant rise in Eurozone consumer confidence is joined by more positive data this morning, in the form of hefty improvements in German manufacturing PMI and Eurozone Services PMI. German Manufacturing PMI hit 48.8, an 11 month high, in January whilst Eurozone Services PMI defied expectations and reached 48.2 – good news for both the Eurozone and its largest economy. Gains in the common currency could be tempered however by the revelation that Spanish unemployment hit a record high in the last quarter of 2012. News out of the US will be the other main cause of Euro movement today.

The Euro is presently trading against the Pound in the region of 0.8406 and is trading against the US Dollar in the region of 1.3318

Australian Dollar

Following the release of a survey which showed that Chinese manufacturing expanded at the most rapid pace for two years the Australian Dollar snapped its recent run of declines and gained by 0.4 per cent on the Yen. A disappointing Australian consumer price figure did cause the ‘Aussie’ to continue trading lower against its New Zealand rival however, and the currency dropped for a third day against the ‘Kiwi’. This evening sees the release of several key pieces of economic data for Japan, another of Australia’s main trading partners, so further volatility could be on the cards.

The Australian Dollar is presently trading against the Pound in the region of 0.6630, is trading against the Euro in the region of 0.7887 and is trading against the US Dollar in the region of 1.0508

New Zealand Dollar

The New Zealand Dollar was able to continue climbing against its Australian counterpart as data for the latter nation once again came in below expectations. After a lower-than-forecast Australian consumer price figure the ‘Kiwi’ gained 0.4 per cent, while a positive result for China pushed the currency 0.9 per cent higher against the Japanese Yen. The Japanese national consumer price index and the release of the Bank of Japan’s latest meeting minutes could be the main causes of movement in the South Pacific currency today.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5312, is trading against the Euro in the region of 0.6313 and is trading against the US Dollar in the region of 0.8416

Canadian Dollar

After the Bank of Canada asserted that the Canadian economy will take longer to reach full output than previously expected, and consequently reduced the urgency of an increase in interest rates, the ‘Loonie’ dropped to parity against its American competitor. As well as hitting a two-month low against the US Dollar the Canadian Dollar posted losses against all but one of its other most traded peers. In the absence of Canadian economic data, today movement in the currency will occur in response to global economic developments, but a stream of data for the nation is scheduled for release tomorrow.

The Canadian Dollar is presently trading against the Pound in the region of 0.6313, is trading against the Euro in the region of 0.7511 and is trading against the US Dollar in the region of 1.0004

 

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.