Pound retained gains

Pound Sterling

The Pound was able to retain gains made after last week’s better-than-expected UK third quarter GDP lowered expectations for further Bank of England quantitative easing. Sterling was able to achieve a three-week high against the Euro before the close of trade on Friday, but gains against its other main currency rivals were tempered as investors viewed the upbeat UK developments with caution. The Pound dropped 0.2 per cent against the US Dollar after Thursday’s high. Today’s UK Mortgage Approvals figure for September is expected to show improvement and if it exceeds expectation than confidence in UK economic recovery could be slightly restored.

The Pound is presently trading against the Euro in the region of 1.2451 and is trading against the US Dollar in the region of 1.6063

US Dollar

Although the US third quarter GDP figure outdid expectations movement in the US Dollar was limited on Friday and the ‘Greenback’s most significant advances were made against the Canadian Dollar. Volatility can be expected over the course of the week as several pieces of key data are released. On Tuesday investors will be focusing on the CB Consumer Confidence figure whilst Thursday will see the ADP Non-Farm Employment Change and ISM Manufacturing PMI statistics. The most influential indicator, the Non-Farm Payrolls figure, is likely to cause notable movement on Friday.

The US Dollar is presently trading against the Pound in the region of 0.6224 and is trading against the Euro in the region of 0.7752

Euro

The Euro was pushed lower against several of its main peers after the odds of Greece achieving its austerity targets decreased and Spain continued to dodge requesting a bailout. The Euro fell to its lowest level for several weeks against the British Pound and although the common currency was able to rebound slightly before the close of trade on Friday it posted virtually no gains.  This week a batch of Eurozone data, including EC Economic Business Climate Index and EC Economic Sentiment on Tuesday. If the recent trend of weak indicators continues the Euro could post significant losses as the week progresses.

The Euro is presently trading against the Pound in the region of 0.8026 and is trading against the US Dollar in the region of 1.2888

Australian Dollar

As the US election creeps ever closer concern over who the victor will be have combined with dropping Asian shares to cause the Australian Dollar to decline against its biggest currency rivals. Although it recorded a 0.2 per cent drop against the US Dollar, ‘Aussie’ losses were tempered by the increasing hope that the Reserve Bank of Australia won’t have to cut interest rates in November. With little Australian economic news on the horizon for the week ahead fluctuations in the currency will likely result from developments in America, Europe and Asia.

The Australian Dollar is presently trading against the Pound in the region of 0.6439, is trading against the Euro in the region of 0.8023 and is trading against the US Dollar in the region of 1.0349

New Zealand Dollar

Although US and Asian concerns saw the ‘Kiwi’ weaken against several of its peers – notably dropping by 0.2 per cent against the ‘Greenback’ –  demand for the New Zealand Dollar was somewhat maintained by the South Pacific nation’s comparatively stable economic growth and high yields. This week the Bank of Japan’s decision regarding fiscal stimulus could cause the New Zealand Dollar to fluctuate, as could Wednesday’s settlement of the Debt Management Office’s sale of a billion of 2025 inflation indexed bonds.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5106, is trading against the Euro in the region of 0.6368 and is trading against the US Dollar in the region of 0.8217

Canadian Dollar

Bank of Canada Governor Mark Carney’s cautioning comments continue to negatively affect the ‘Loonie’. Last week Carney intimated that there was less urgency to raise interest rates and in the days following the Canadian Dollar was pushed lower, finally hitting an eight-week low against its US counterpart. The Canadian currency was also knocked by the government’s decision to impede an oil-field takeover bid. Developments in the US will probably be the main source of movement for the currency over the course of this week.

The Canadian Dollar is presently trading against the Pound in the region of 0.6232, is trading against the Euro in the region of 0.7760 and is trading against the US Dollar in the region of 1.0010

 

Laura Barrett
This post was written by
Laura moved from the US to the UK several years ago. As a corporate sales executive for a leading foreign exchange company, Laura has expert knowledge of currency movements and market trends and is able to offer specialist guidance regarding making a trade at the most lucrative time and protecting transactions from currency risk.