Pound gained on Japanese Yen

Pound Sterling

The Pound gained on the Japanese Yen and achieved a 16-month high against its American counterpart after US Lawmakers closed their ‘fiscal-cliff’ negotiations. After months of uncertainty the planned series of automatic tax hikes and spending cuts which would have sent the American economy into recession were averted, improving the prospects for global economic recovery. As a consequence riskier currencies, including the British Pound, were able to record significant advances against their safe-haven currency rivals. Sterling was also able to benefit from the expectation that today’s manufacturing PMI figure will show stabilization in UK manufacturing.

The Pound is presently trading against the Euro in the region of 1.2291 and is trading against the US Dollar in the region of 1.6319

US Dollar

After US Lawmakers finally approved legislation which would allow them to bypass a ‘fiscal cliff’ of tax hikes and spending cuts the global economic outlook improved. Consequently, demand for safe-haven assets lessened and the US Dollar posted declines against the majority of its most traded rivals. Further ‘Greenback’ movement could occur if the US ISM manufacturing figure meets expectations. Industry experts have forecast that the data will show an improvement in the manufacturing sector. If this proves accurate the US Dollar could see additional declines over the course of the day.

The US Dollar is presently trading against the Pound in the region of 0.6124 and is trading against the Euro in the region of 0.7531

Euro

Despite posting modest losses against the majority of its peers on Monday, the Euro was able to turn bullish today after budget negotiations in the US came to a positive conclusion. Additional movement can be expected this afternoon following the release of influential data for the currency bloc, including Eurozone and German manufacturing PMI figures and December’s German consumer price index.

The Euro is presently trading against the Pound in the region of 0.8136 and is trading against the US Dollar in the region of 1.3281

Australian Dollar

The Australian Dollar was able to gain on a bearish US Dollar and achieve a four-year high against the Japanese Yen as risk-taking dominated the marketplace. After US Lawmakers successfully struck a deal which would allow them to bypass the dreaded ‘fiscal cliff’ the outlook for global economic recovery improved, a circumstance which usually causes the ‘Aussie’ to climb. The next piece of influential Australian economic data, the AiG performance of service index, will be released tomorrow.

The Australian Dollar is presently trading against the Pound in the region of 0.6431, is trading against the Euro in the region of 0.7901 and is trading against the US Dollar in the region of 1.0493

New Zealand Dollar

With the fiscal cliff averted Asian stocks soared to a five-month high and risk appetite strengthened. Both of these factors allowed the New Zealand Dollar to gain, with the ‘Kiwi’ hitting a four-year high against the safe-haven Japanese Yen. In the absence of economic data from the South Pacific any movement in the New Zealand Dollar over the course of the day can most likely be attributed to US developments.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5122, is trading against the Euro in the region of 0.6234 and is trading against the US Dollar in the region of 0.8370

Canadian Dollar

For the first time in four days the ‘Loonie’ was able to gain on its broadly softening American cousin. After the US ‘fiscal cliff’ was sidestepped at zero hour the commodity-driven Canadian Dollar advanced against most of its competitors. A lack of Canadian economic news today means that any fluctuations in the ‘Loonie’ will most likely be the result of further developments in the US.

The Canadian Dollar is presently trading against the Pound in the region of 0.6214, is trading against the Euro in the region of 0.7636 and is trading against the US Dollar in the region of 1.0138

 

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.