US Dollar expected to experience significant volatility

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Pound Sterling

Ahead of today’s influential US non-farm payrolls report the Pound was in line to record its most significant 5-day advance against the US Dollar for over three years. Sterling broadly strengthened yesterday in the aftermath of the Bank of England’s latest policy meeting but was little changed against the Euro. The currency has been boosted this week by several pieces of positive domestic data.

GBP/EUR is trading in the region of 1.1766 and GBP/USD is trading in the region of 1.5580

US Dollar

The US Dollar is expected to experience significant volatility today. A better-than-expected non-farm payrolls report would increase the likelihood of the Federal Reserve reining in easing and boost the Dollar, but a disappointing result could see the ‘Greenback’ decline against the majority of its peers.

USD/GBP is trading in the region of 0.6420 and USD/EUR is trading in the region of 0.7551

Euro

After the European Central Bank left rates and policy unchanged and intimated that they expect the Eurozone to gradually recover from its economic downturn, the Euro broadly strengthened, pushing above 1.32 against the US Dollar. Although investors will mainly be focusing on US news today, German industrial production figures will also be of interest.

EUR/GBP is trading in the region of 0.8502 and EUR/USD is trading in the region of 1.3243

Australian Dollar

With signs of a slowdown in Australia increasing and concerns that the Federal Reserve will start to pare quantitative easing weighing heavily on the ‘Aussie’ the South Pacific currency fell as low as 94.65 cents against the US Dollar during local trade. Volatility is expected to occur this afternoon as the US non-farm payrolls figures are released.

AUD/GBP is trading in the region of 0.6104, AUD/EUR is trading in the region of 0.7188 and AUD/USD is trading in the region of 0.9510

New Zealand Dollar

Although the ‘Kiwi’ rose modestly against the US Dollar during the local session the South Pacific currency is still in line to record a 5-day decline of 2.4 per cent. However, if today’s US employment data fails to meet expectations the appeal of higher-risk currencies will rise and the New Zealand Dollar could recoup some of its recent losses.

NZD/GBP is trading in the region of 0.5123, NZD/EUR is trading in the region of 0.6010 and NZD/USD is trading in the region of 0.7979

Canadian Dollar

After new Bank of Canada Governor Stephen Poloz stated that interest rates will rise as the economy grows the Canadian Dollar was able to advance by the most for nearly a year against its US counterpart, strengthening to 97.39 US cents. Although Canadian unemployment figures are likely to impact the ‘Loonie’ today the main market mover will be US non-farm payrolls data.

CAD/GBP is trading in the region of 0.6248, CAD/EUR is trading in the region of 0.7357 and CAD/USD is trading in the region of 0.9742

These exchange rates were correct as of 9:20 am

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.