Pound close to a 5 month low

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Pound Sterling

The UK was braced for the worse, but the latest data has shown that in the last quarter of 2012 the UK economy actually contracted by even more than expected as the Olympic effect died out and mining output plummeted. Fears that this result will be followed by another quarter of contraction, which would push the UK into a triple dip recession, have pushed the Pound close to a 5 month low against the US Dollar and caused it to trade lower against a bullish Euro.

The Pound is presently trading against the Euro in the region of 1.1763 and is trading against the US Dollar in the region of 1.5804

US Dollar

The US Dollar was able to post notable gains against the British Pound yesterday following a disappointing UK BBA mortgage approvals figure. The ‘Greenback’s gains were aided by the anticipation of fourth quarter UK contraction, which could lead to a triple-dip recession. Now that it has been revealed that UK GDP fell by more than forecast the US Dollar is likely to continue gaining on its British currency rival over the course of the day. US home sales figures will also be of interest this afternoon.

The US Dollar is presently trading against the Pound in the region of 0.6328 and is trading against the Euro in the region of 0.7440

Euro

The Euro continues to go from strength to strength, benefiting from this morning’s news that German business confidence rose for a third consecutive month. This latest indication that the currency bloc’s largest economy is recovering from recession pushed the Euro to levels over 0.8520 against the Pound. However, with the European Central Bank releasing volatile loan repayment data in the hours ahead the common currency is likely to continue fluctuating.

The Euro is presently trading against the Pound in the region of 0.8501 and is trading against the US Dollar in the region of 1.3430

Australian Dollar

The ‘Aussie’ was able to advance on the safe-haven Japanese Yen following hopes that outside pressures, such as yesterday’s disappointing Japanese core consumer price figures, will encourage the Bank of Japan to initiate additional stimulus earlier than scheduled. The Australian Dollar gained 0.2 per cent on the Yen but further demand for the South Pacific currency was tempered by the increasing likelihood of the Reserve Bank of Australia lowering its Benchmark to 2.75 per cent at the beginning of February. Today movement in the ‘Aussie’ is most likely to be triggered by developments in the UK, Eurozone and US.

The Australian Dollar is presently trading against the Pound in the region of 0.6612, is trading against the Euro in the region of 0.7776 and is trading against the US Dollar in the region of 1.0454

New Zealand Dollar

After experiencing a bearish relationship with the US Dollar yesterday, and in light of recent trends, Citigroup Inc. has commented that the New Zealand Dollar could continue to fall against this safe-haven rival, potentially dropping as low as 81.56 US cents – the lowest level for a month. Concerns regarding North Korean nuclear testing may continue to weigh on the ‘Kiwi’ today and additional movement is likely to occur in response to global economic developments.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5301, is trading against the Euro in the region of 0.6253 and is trading against the US Dollar in the region of 0.8380

Canadian Dollar

Better-than-forecast American manufacturing data boosted the commodity-driven Canadian currency yesterday, allowing it to achieve a gain of 0.5 Cents against the British Pound. However, with volatile Canadian consumer price figures imminent the ‘Loonie’ was unable to maintain its advance, experiencing a downward correction before the end of trade. Fluctuations can be expected over the course of the day in light of several pieces of influential economic data for the UK, Eurozone and Canada.

The Canadian Dollar is presently trading against the Pound in the region of 0.6310, is trading against the Euro in the region of 0.7421 and is trading against the US Dollar in the region of 0.9968

 

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.