Pound hits 5 1/2 year low against Euro

Pound Sterling

After the briefest of rallies against the Euro the Pound fell again, this time hitting its lowest level against its European counterpart for 5 ½ months. Sterling’s slip was triggered by the common currency broadly firming after Spanish Prime Minister Mariano Rajoy scored a significant victory in his country’s regional elections. However, lessened risk aversion also meant that the Pound was able to strengthen against its American cousin. This movement was buoyed as expectations rise that Thursday’s preliminary growth data will hint at positive UK economic recovery.
The Pound is presently trading against the Euro in the region of 1.2282 and is trading against the US Dollar in the region of 1.6011

US Dollar

The US Dollar was able to gain significantly on the Japanese Yen as the strain of potential Bank of Japan monetary easing began to tell on the latter safe-haven currency. Although the ‘Greenback’ weakened against several of its riskier counterparts on the back of positive developments in the Eurozone it was able to achieve a three-month high against the Yen. A lack of economic news in the US today means that any volatility in the American currency will result from developments in other nations such as the Canadian interest rates announcement.
The US Dollar is presently trading against the Pound in the region of 0.6247 and is trading against the Euro in the region of 0.7671

Euro

The common currency broadly firmed against the majority of its rivals after confidence in Spain’s leadership was bolstered by the country’s President Mariano Rajoy securing a key victory in Spain’s regional elections. Reassuring comments from European Central Bank policymaker Joerg Asmussen also contributed to the Euro hitting a 5 ½ month high against its British rival. However, the European currency’s recent gains will only be able to hold up in the long term if the still uncertain Spanish bailout is secured. Investors will be taking a keen interest in this afternoon’s release if Eurozone Flash Consumer Confidence.
The Euro is presently trading against the Pound in the region of 0.8142 and is trading against the US Dollar in the region of 1.3030

Australian Dollar

With Australia’s influential consumer price data due tomorrow the ‘Aussie’ retained a three-day loss and was unable to hold on to the slight gains made against the US Dollar. Demand for the Australian Dollar was dampened by lowering Asian shares and the increasing likelihood of the Reserve Bank of Australia slashing rates once more.
The Australian Dollar is presently trading against the Pound in the region of 0.6438, is trading against the Euro in the region of 0.7911 and is trading against the US Dollar in the region of 1.0319

New Zealand Dollar

Despite Eurozone developments whetting risk appetite the ‘Kiwi’ recorded little movement, possibly because the imminent central bank meetings in Canada, the US and New Zealand have triggered investor restraint. Although traders have forecast a 15 per cent chance of the Reserve Bank of New Zealand Governor announcing a rates cut during tomorrow’s meeting Graeme Wheeler is largely expected to hold the benchmark rate at 2.55. ‘Kiwi’ volatility could be triggered by Australia’s third-quarter consumer price figures tomorrow as well as New Zealand’s central bank meeting.
The New Zealand Dollar is presently trading against the Pound in the region of 0.5098, is trading against the Euro in the region of 0.6263 and is trading against the US Dollar in the region of 0.8157

Canadian Dollar

With the Bank of Canada meeting only hours away, belief that the central bank will focus less on raising interest rates pushed the ‘Loonie’ to a 10 week low against its US rival. The Canadian Dollar also fell against the majority of its other main peers. At today’s meeting Bank of Canada Governor Mark Carney is expected to hold the target for the overnight rate at 1 per cent.
The Canadian Dollar is presently trading against the Pound in the region of 0.6284, is trading against the Euro in the region of 0.7721 and is trading against the US Dollar in the region of 1.0055

 

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.