US Dollar gains on Yen

Pound Sterling

The Pound was able to achieve a four-week high against the US Dollar yesterday despite fears that tomorrow’s mid-year fiscal statement will offer a despondent outlook for the UK economy. Although UK manufacturing PMI data triggered little movement sovereign and corporate demand pushed Sterling to 1.6099 US Dollars. It later fell back to 1.6090 Dollars but still ended trade up 0.5 per cent on the day. Of interest today are UK Construction PMI figures for November and developments in the Eurozone. Investors will also be looking ahead to Thursday’s Bank of England Rate decision, currently industry experts are expecting the central bank to hold off on quantitative easing and maintain present rates.

The Pound is presently trading against the Euro in the region of 1.2329 and is trading against the US Dollar in the region of 1.6116

US Dollar

Positive signs regarding global economic recovery led to heightened risk appetite in the marketplace yesterday. Consequently, the safe-haven ‘Greenback’ began the week trading lower against several of its main currency rivals, although it did manage to advance on the Japanese Yen. A lack of significant economic news for the US means that fluctuations in the Dollar are likely to result from developments in the Eurozone, such as the release of Eurozone Producer Price Index figures for October.

The US Dollar is presently trading against the Pound in the region of 0.6204 and is trading against the Euro in the region of 0.7649

Euro

Yesterday better-than-forecast Chinese data releases and a more optimistic outlook for Greece encouraged a bout of risk taking from which the Euro was able to benefit. The common currency soared to a six-week high against the US Dollar and remains trading close to that level. Further upward movement could be seen if today’s meeting of European Union Finance Ministers yields positive results. Eurozone Producer Price Index figures for October could also cause fluctuations in the hours ahead.

The Euro is presently trading against the Pound in the region of 0.8111 and is trading against the US Dollar in the region of 1.3075

Australian Dollar

As expected by industry experts the Reserve Bank of Australia cut the benchmark interest rate yesterday, taking the overnight cash-rate target from 3.25 percent to 3 percent. Despite this, the ‘Aussie’ rose against the majority of its counterparts, climbing 0.3 per cent against the US Dollar. Demand for the Australian Dollar was tempered however as the South Pacific nation recorded a wider-than-forecast current-account deficit and other data showed Australian building approvals had fallen by the most for three months. Towards the end of today Australian AiG Performance of Service Index figures could cause movement.

The Australian Dollar is presently trading against the Pound in the region of 0.6491, is trading against the Euro in the region of 0.8004 and is trading against the US Dollar in the region of 1.0452

New Zealand Dollar

The New Zealand Dollar climbed alongside its Australian rival following the Reserve Bank of Australia’s decision to cut interest rates to a three year low. Industry experts feel that both South Pacific currencies could quickly drop back to the levels held before the rates announcement, though with the Reserve Bank of New Zealand’s monetary policy review imminent further movement can be expected. Yesterday ANZ New Zealand figures also showed a fourth consecutive month of price rises for New Zealand commodities.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5112, is trading against the Euro in the region of 0.6297 and is trading against the US Dollar in the region of 0.8240

Canadian Dollar

After US data revealed an unexpected contraction in America’s manufacturing sector in November the Canadian Dollar softened slightly against the ‘Greenback’. Canadian data showing a fifth month of slowing manufacturing growth also contributed to the currencies modest declines. Losses in the ‘Loonie’ were limited however as optimistic Chinese data buoyed the commodity-driven currency. The event most likely to trigger movement in the Canadian Dollar today is the Bank of Canada’s Rate Decision.

The Canadian Dollar is presently trading against the Pound in the region of 0.6242, is trading against the Euro in the region of 0.7696 and is trading against the US Dollar in the region of 1.0061

 

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.