US Dollar and Japanese Yen strengthened

Pound Sterling

After data showed increasing confidence in the UK’s economic outlook among executives the Pound was able to advance on its European rival for a second day, gaining on the Euro by 0.3 per cent. Sterling was largely unchanged against the US Dollar. Several influential data releases – including UK manufacturing PMI figures for December – could trigger fluctuations in the Pound this week but ‘fiscal cliff’ concerns will continue to dominate marketplace movement.

The Pound is presently trading against the Euro in the region of 1.2255 and is trading against the US Dollar in the region of 1.6165

US Dollar

Over the weekend US Lawmakers met with President Barack Obama in a further attempt to reach an acceptable budget agreement. However, no decision which would allow the ‘fiscal cliff’ of spending cuts and tax hikes to be avoided was reached. Consequently, risk appetite decreased and safe-haven currencies like the US Dollar and Japanese Yen strengthened. This issue will continue to cause extreme volatility in the ‘Greenback’ as the week progresses.

The US Dollar is presently trading against the Pound in the region of 0.6186 and is trading against the Euro in the region of 0.7583

Euro

Despite trading lower during the first half of Friday the Euro managed to recoup some of its losses before markets closed despite the looming shadow of the ‘fiscal cliff’. However, optimistic UK data caused the common currency to fall against its British rival. This week Euro fluctuations could occur as a result of data releases, including German unemployment change figures, as well as developments in the US.

The Euro is presently trading against the Pound in the region of 0.8161 and is trading against the US Dollar in the region of 1.3192

Australian Dollar

After a Chinese manufacturing gauge showed better-than-forecast expansion the ‘Aussie’ strengthened against its safe-haven rivals, gaining 0.1 per cent on the ‘Greenback’ and 0.4 per cent on the Japanese Yen. If this week’s other Chinese data releases also come in above expectations the Australian Dollar could continue to strengthen.

The Australian Dollar is presently trading against the Pound in the region of 0.6419, is trading against the Euro in the region of 0.7865 and is trading against the US Dollar in the region of 1.0377

New Zealand Dollar

With the prospects of one of its main trading partners improved New Zealand’s currency was able to advance on several of its counterparts, notably the US Dollar and Japanese Yen. ‘Kiwi’ movement will be limited this week by a lack of economic news for the South Pacific nation but fluctuations could be triggered by developments in Asia and the US.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5100, is trading against the Euro in the region of 0.6200 and is trading against the US Dollar in the region of 0.8221

Canadian Dollar

A lack of resolution regarding the ‘fiscal cliff’ issue caused the commodity-driven Canadian Dollar to continue its recent bearish trend, losing 0.16 of a cent over the course of trade on Friday. On Friday ‘Loonie’ movement could follow the release of several pieces of Canadian data, including Canadian net change in unemployment figures.

The Canadian Dollar is presently trading against the Pound in the region of 0.6217, is trading against the Euro in the region of 0.7621 and is trading against the US Dollar in the region of 1.0053

 

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.