UK consumer price Inflation data released this morning was in line with expectations and recent news of world central bank interventions kept sterling trading within the periphery of its four and a half month high despite Spanish woes. More positive data in recent weeks has buoyed the pound slightly. It continues to hold up well today and outperform the euro. Some analysts are predicting that sterling gains are on the horizon following the Federal Reserve’s decision last week to adopt more aggressive quantitative easing policies.
The Pound is presently trading against the Euro in the region of 1.2427 and is trading against the US Dollar in the region of 1.6234
Continuing concerns relating to Spain’s reluctance to accept aid has bolstered perceptions of the US dollar as a safe haven currency. As a result the US dollar gained against all of its main peers with the euro falling to a three day low against it. The dollar index (which measures the performance of the US dollar against six other dominant currencies) traded at 79.17 – an increase of 0.11 per cent. Later today the US will release a report focusing on the balance of domestic and foreign investment for long term securities as well as a separate report detailing official figures for the current account.
The US Dollar is presently trading against the Pound in the region of 0.6158 and is trading against the Euro in the region of 0.7659
The Euro’s dizzy four-month high against the US dollar and yen was rather short lived. Whether or not Spain will ask for aid is still a significant cause for concern and as Spain sold 4.6 billion euro’s of short maturity debt the euro weakened against the aforementioned currencies. Prior to the release of a German report detailing the nation’s faltering investor confidence the euro lost its five-day advance against the yen. Some traders and industry experts have expressed concerns that the euro may currently be overvalued and could begin to reverse in the near future. These warnings have been based on the fact that the euro’s fortnightly relative strength index versus the yen and the dollar remained above 70 today.
The Euro is presently trading against the Pound in the region of 0.8045 and is trading against the US Dollar in the region of 1.3060
The Australian dollar continues to decline following last week’s six-month high. Minutes of this month’s Reserve Bank Meeting revealed today that officials perceive the strength of the currency as an economic risk and have noted the potential to cut interest rates. Shortly after the report was released the Australian dollar weakened against the majority of its largest compatriots. The appeal of higher-yielding assets was also dampened by the increased tension between Asian heavyweights China and Japan. This, combined with fears regarding the ongoing European debt crisis, led to the Australian dollar falling against both the yen and US dollar.
The Australian Dollar is presently trading against the Pound in the region of 0.6416, is trading against the Euro in the region of 0.7972 and is trading against the US Dollar in the region of 1.0418
New Zealand Dollar
Investors are taking the time to consider the implications of the latest quantitative easing measures adopted by the Federal Reserve. This has led to the lowering of stock markets and other risk receptive assets and as a consequence the Kiwi currency has fallen against the US dollar. Barring this the currency remains generally unchanged from yesterday. However, concerns expressed last week by the New Zealand Central Bank’s outgoing Governor Alan Bollard regarding exporters and local manufacturers suffering due to the strength of the New Zealand dollar have not abated.
The New Zealand Dollar is presently trading against the Pound in the region of 0.5089, is trading against the Euro in the region of 0.6308 and is trading against the US Dollar in the region of 0.8263
For a second consecutive day the Canadian dollar fell against its neighbouring currency and continued its decline from an over 12-month high. Tumbling oil prices, slipping stocks and investors reluctant to consider high-yielding assets have resulted in the US dollar advancing against its sliding Canadian cousin. The latter currency wasn’t helped by a data release which indicated that in August existing Canadian home sales dropped by the most significant amount for more than two years. It is anticipated that a report scheduled to be released later this week will show the nations inflation rate holding steady at 1.3 per cent.
The Canadian Dollar is presently trading against the Pound in the region of 0.6313, is trading against the Euro in the region of 0.784600 and is trading against the US Dollar in the region of 1.0248