Pound advances on US Dollar

Pound Sterling

Following the release of better than forecast UK borrowing data the Pound gained on its American rival. The British Pound was close to achieving a 13 month high against the US Dollar until the later currency strengthened in light of Euro-Zone developments. Some analysts are predicting that Sterling could rally towards the close of the week as the UK economy receives a 3 billion Euro boost from EU farm subsidy payments on the 28th.

The Pound is presently trading against the Euro in the region of 1.2533 and is trading against the US Dollar in the region of 1.6244

US Dollar

News of European leadership clashes and Euro-Zone instability has led to the US Dollar making gains against the majority of its prominent trading partners. Key data releases scheduled for Tuesday, Wednesday and Thursday are expected to show some improvement in the rate of US economic recovery. If the predictions are accurate than the US Dollar could improve on the advances it has already made.

The US Dollar is presently trading against the Pound in the region of 0.6173 and is trading against the Euro in the region of 0.7750

Euro

Recent reports have indicated that France and Germany are butting heads over the proposed reconfiguration of banking supervision, particularly the timeline of the overhaul. This news, combined with news that the German IFO reading was lower than expected, has resulted in the formally rallying Euro losing ground against the US Dollar. Whether this decline will continue or be reversed is largely dependent on decisions finally being reached in struggling Spain and Greece.

The Euro is presently trading against the Pound in the region of 0.7971 and is trading against the US Dollar in the region of 1.2910

Australian Dollar

Gains made by the Australian Dollar last week, (following news that the nation’s central bank would hold rates at around zero until unemployment drops) have been lost as demand for higher yielding assets fell in response to Euro-Zone developments. The Australian currency has fallen against its major competitors with the possibility of advancement now resting with the Reserve Bank of Australia.

It is expected that a rates reduction will be announced next week following the RBA’s policy meeting and if this proves correct the Australian Dollar could regain lost ground.

The Australian Dollar is presently trading against the Pound in the region of 0.6425, is trading against the Euro in the region of 0.8055 and is trading against the US Dollar in the region of 1.0387

New Zealand Dollar

This week the forecast trading range for the ‘Kiwi’ is from 81.89 to 84.30 US cents but Euro-Zone concerns have left it trading at the lower end of this spectrum. Some analysts are forecasting that the New Zealand Dollar could even end the week below expectations, particularly if September’s Business Outlook Survey compiled by the National Bank of New Zealand dips below the readings recorded for August.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5067, is trading against the Euro in the region of 0.6354 and is trading against the US Dollar in the region of 0.8206

Canadian Dollar

Recent data has shown that in August Canada’s annual inflation rate dropped from 1.3 per cent to 1.2 per cent and it remains unlikely that the Canadian Central Bank will raise interest rates. With yet more Euro-Zone uncertainty it appears that investors may continue their recent trend of overlooking the Canadian Dollar in favour of its more assured American counterpart.

The Canadian Dollar is presently trading against the Pound in the region of 0.6299, is trading against the Euro in the region of 0.7898 and is trading against the US Dollar in the region of 1.0206

 

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.