After achieving a one-month high against the US Dollar earlier in the week the Pound dropped to a one-month low against a broadly strengthening Euro. Sterling is likely to experience considerable fluctuations today following Chancellor of the Exchequer George Osborne’s mid-year statement to Parliament. Also of interest is the UK Services PMI figures scheduled for release this afternoon.
The Pound is presently trading against the Euro in the region of 1.2283 and is trading against the US Dollar in the region of 1.6104
Ongoing concerns regarding next year’s fiscal cliff resulted in the ‘Greenback’ falling against the vast majority of its most traded currency rivals. Fears that the US may not be able to side-step the series of tax hikes and spending cuts led to the US Dollar posting particularly notable declines against fellow safe-haven asset the Japanese Yen. Today significant movement in the US Dollar can be expected following the release of several key economic indicators, such as ADP Non-Farm Employment Change figures. Developments in the fiscal cliff negotiations could also cause volatility.
The US Dollar is presently trading against the Pound in the region of 0.6211 and is trading against the Euro in the region of 0.7627
Far better-than-forecast Spanish Unemployment Change data boosted confidence in the nation’s economic recovery and improved the Eurozone’s outlook. Consequently, the Euro enjoyed an upward surge yesterday, gaining on several of its most prominent counterparts and hitting a one-month high against the Pound. The most important piece of data on the cards for today is the Eurozone Retail Sales figure for October. If it should exceed expectations the common currency could continue its bullish trend but if it disappoints yesterday’s gains could be erased.
The Euro is presently trading against the Pound in the region of 0.8141 and is trading against the US Dollar in the region of 1.3112
The Australian Dollar continued to trade at a comfortable level despite the release of data which showed that the South Pacific nation’s economy slowed. The ‘Aussie’ remained resilient as statistics revealed that the Australian economy grew by 0.5 per cent in the third quarter compared with 0.6 in the second while GDP grew by 3.1 per cent on an annualised basis rather than the 3.5 per cent the Reserve Bank of Australia was hoping for. A lack of significant Australian economic news means that investors will be looking ahead to tomorrows Australian Employment Change and Unemployment Rate figures.
The Australian Dollar is presently trading against the Pound in the region of 0.6503, is trading against the Euro in the region of 0.7985 and is trading against the US Dollar in the region of 1.0473
New Zealand Dollar
Positive developments in the Eurozone increased risk appetite and allowed the ‘Kiwi’ to climb higher against the US Dollar. However, investors are now anxiously awaiting Reserve Bank of New Zealand Governor Graeme Wheeler’s first monetary policy statement and the central bank’s rate decision. Although industry experts are forecasting that the RBNZ will keep the official cash rate at its present level of 2.5 per cent the tone of Wheeler’s statement could trigger movement in the New Zealand Dollar.
The New Zealand Dollar is presently trading against the Pound in the region of 0.5125, is trading against the Euro in the region of 0.6294 and is trading against the US Dollar in the region of 0.8246
Yesterday the Bank of Canada held its key rate at 1.00 per cent, its deposit rate at 0.75 per cent and its bank rate at 1.25 per cent. A statement released with the decision highlighted weak Canadian economic activity in the third quarter but detailed an expected pick-up in growth in 2013 driven by business investment and consumption growth. At the close of the statement the BoC disclosed that ‘some modest withdrawal of monetary policy stimulus will likely be required, consistent with achieving the 2 per cent inflation target.’ ‘Loonie’ movement was fairly limited following the rate announcement, although the currency did strengthen against its American counterpart.
The Canadian Dollar is presently trading against the Pound in the region of 0.6263, is trading against the Euro in the region of 0.7694 and is trading against the US Dollar in the region of 1.0087