Foreign Exchange

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Currency Update

Pound Sterling

The Pound fell against the majority of its peers yesterday after the Bank of England said that it was in no rush to raise interest rates and failed to revise its growth forecasts for the coming year as economists had expected. Positive unemployment data was overshadowed by disappointing wage growth figures. With a lack of UK data today we could see the Pound soften further if events elsewhere weigh upon the currency.

US Dollar

The US Dollar advanced to its best level in 3-weeks against the Pound yesterday after comments made by the Bank of England weighed upon the UK currency. The ‘Greenback’ found some support from data which showed that applications for mortgages increased last week, easing some of the concern over the US housing market. Economists are expecting today’s US jobless claims, manufacturing and industrial production data to add to signs that the world’s largest economy is continuing its recovery.

The Euro

The Euro softened slightly against the Pound and US Dollar after data showed that growth in the French economy stalled in the first quarter of the year. The German economy meanwhile grew more than forecast highlighting the disparity between the Eurozone’s top two economies.  GDP data for the wider Eurozone as well as inflation data will be closely watched today as weakness in either could cause investors to raise their bets that the European Central Bank will introduce new stimulus measures at next month’s policy meeting.

Australian Dollar

The ‘Aussie’ edged higher against its peers as investors wait for today’s US data releases. A stagnant new car sales report had little impact on the currency. Official data showed that new car sales in Australia were flat last month.

New Zealand Dollar

The New Zealand Dollar remained firmer against several rivals despite the release of disappointing manufacturing data. Business New Zealand’s performance of manufacturing index dropped to 55.3 in April, down from the 58 recorded in March and well below forecasts for a rise to 58.4.

Canadian Dollar

The Canadian Dollar edged higher against several counterparts due to a rise in commodity prices and increased demand for perceived riskier assets. The price of crude oil, Canada’s biggest export, climbed to its highest level in three-weeks.

South African Rand

The Rand is little moved from yesterday’s levels as it remained supported by increased risk appetite. Continuing violence in the South African platinum mining belt and events in Ukraine could still weigh upon the Rand.

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Pound Sterling

On Monday the Pound was little moved against its major peers due to a lack of data releases. The only piece of data due for Sterling is the latest Lloyds employment confidence report, which is likely to have little impact upon the market. Traders will be looking ahead to Wednesday’s UK unemployment and inflation data. If unemployment falls further then we can expect Sterling to strengthen as more pressure will be placed upon the Bank of England to raise interest rates.

US Dollar

The US Dollar is holding steady against its peers as investors look ahead to this evening’s monthly US budget statement. A lack of other data is likely to leave the currency static throughout the session. Traders remain cautious following the weekend’s referendum victory for Pro-Russian separatists in Ukraine. The world will be watching to see how Kiev responds to a vote which it deems illegal.

The Euro

The Euro is trading close to a one-month low against the US Dollar and remains weaker against the Pound as investors await speeches by European Central Bank officials. The single currency remains under pressure after ECB President Mario Draghi said that the Central Bank could introduce monetary easing measures next month.

Australian Dollar

The ‘Aussie’ experienced little movement overnight despite the release of positive domestic business confidence data. The currency was unable to make gains as concerns over geopolitical tensions in Ukraine and a standoff between China and Vietnam dented demand for riskier assets.

 New Zealand Dollar

The New Zealand Dollar inched higher against its U.S. counterpart but was little moved against the Pound on Monday. Gains are expected to remain limited as investors exert caution amid ongoing Ukrainian concerns.

Canadian Dollar

The Canadian Dollar remains under pressure from last week’s dismal jobs data and weakened along with other higher –risk assets due to the situation in Ukraine.

 South African Rand

The Rand was holding its ground against several peers as the local session opened and is not far from last week’s five-month high against the US Dollar. Concerns over Ukraine are likely to soften the currency as investors grow averse to riskier assets. Investors will also be looking ahead to a mining report due out later in the week. The data will provide a good indication of what impact the four-month strike has had on the nation’s platinum mining sector.

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Pound Sterling

The Pound advanced to its highest level in nine weeks against the Euro as investors speculated on the outcome of today’s Bank of England policy meeting. Against the US Dollar Sterling is trading just off of its highest level since August 2009 as pressure builds on the BoE to raise interest rates after a run of positive data releases.

US Dollar

The US Dollar weakened against the majority of its peers after Federal Reserve Chairman Janet Yellen said that a high degree of monetary accommodation remains warranted given the slack still remaining in the economy. She also warned that the recent slowdown in the US housing market could last longer than previously expected.  The currency also lost support as demand for riskier assets improved following comments by Russian President Vladimir Putin. The Russian premier called on rebels to postpone their plans for an independence vote while Russian forces withdrew from Ukraine’s border.

The Euro

The Euro is close to a two-month high against the US Dollar and is firmer against the Pound as investors look ahead to today’s European Central Bank policy meeting. The ECB is widely expected to leave policy unchanged following a rise in inflation and signs that the region’s recovery could be broadening.

Australian Dollar

The ‘Aussie’ climbed to a three-week high against the US Dollar and other major peers as upbeat domestic employment and strong Chinese trade data lent it support. Official data showed that the number of Australians in work increased by 14,200 last month, beating forecasts for a rise of 6,000. The Chinese data showed that both imports and exports rose in April, confounding forecasts for a fall.

 New Zealand Dollar

The New Zealand Dollar is holding steady against most major peers as the currency was boosted by the positive Chinese trade data. With a lack of domestic data events in the US, UK and Europe will likely cause movement in the currency today.

Canadian Dollar

The Canadian Dollar softened against several peers yesterday after data showed that the number of building permits issued in the country fell unexpectedly in March. The value of permits fell by 3%, the lowest figure seen in 13 months.

 South African Rand

The Rand is holding steady at its highest level in a month due to stilted trading ahead of the release of results from Wednesday’s general election. With a third of the ballots counted the ruling African National Congress took a clear lead with 59.7% of the votes.

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Pound Sterling

The Pound climbed to its strongest-level in years on Tuesday as positive service PMI data combined with a softer-than-forecast US trade report. Sterling looks set to remain supported throughout today’s session as investors look ahead to tomorrow’s Bank of England interest rate and quantitative easing decisions. With the UK economy performing strongly, pressure is building upon policy makers to raise interest rates sooner-than-expected.

US Dollar

The US Dollar tumbled against many of its major peers due to the release of stronger-than-expected data out of the Eurozone and UK. A weaker-than-forecast trade report for the USA also weighed. The data showed that the US trade deficit narrowed to $40.38 billion in March, just short of expectations for a decline to $40.30 billion. Investors will be looking ahead to the afternoon’s speech by Federal Reserve Chairman Janet Yellen for direction.

The Euro

The Euro is trading close to a seven-week high against the US Dollar as a run of positive Eurozone data releases increased speculation that the European Central Bank will not introduce more stimulus measures at this week’s policy meeting. Yesterday’s data showed a sharp fall in unemployment in Spain and showed that the regions private sector got off to a strong start in the second quarter of the year.

Australian Dollar

The ‘Aussie’ pushed back above the 93 cents mark against the US Dollar and is holding steady despite data showing that retail sales in Australia increased lower than expected in March. Sales rose by 0.1% below expectations for a rise of 0.4%. Against the Pound and Euro the ‘Aussie’ softened.

 New Zealand Dollar

The New Zealand Dollar is weaker against most of its major peers after Reserve Bank of New Zealand Chairman Graeme Wheeler warned that the currency was too high and suggested that the Central Bank could intervene to force it lower. Data released earlier in the Asian session showed that the number of people in work rose by 0.9% in the first quarter.

Canadian Dollar

The Canadian Dollar rallied against the US Dollar and was little moved against the Pound and Euro due to the release of yesterday’s fairly positive trade data. Despite Canada’s trade surplus narrowing more-than-forecast the ‘Loonie’ was able to take advantage of the weakness of the US Dollar.

 South African Rand

The Rand rallied yesterday due to an improvement in demand for riskier assets and as it tracked the Euro higher. Today the South African markets are closed for the nation’s general election. Trading will resume on Thursday.

Courtesy of Torfx

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Daily Currency update

Pound Sterling

The Pound is trading higher against the US Dollar as UK markets reopen following the Bank holiday weekend. Sterling was finding support ahead of the release of today’s Markit UK Services PMI data which is forecast to show a further strengthening of the UK’s dominant sector.

US Dollar

The US Dollar is weaker against the Pound and Euro after coming under pressure following the release of last week’s unemployment data. The Non-Farm Payrolls report showed that the labour force participation rate fell and wage growth weakened. Investors are also remaining cautious due to an escalation in violence in Ukraine over the weekend.

The Euro

The Euro pushed higher against the US Dollar and firmed against the Pound after the European Commission said on Monday that it expects the European economy to continue to recover throughout the year. It expects the Eurozone’s economy to expand by 1.2% in 2014 and by 1.7% in 2015. The currency could find further support if today’s Eurozone retail sales data comes in positively.

Australian Dollar

The ‘Aussie’ strengthened against the US Dollar after the Australian Reserve Bank left interest rates unchanged and said that there had been improvement in the nation’s job market. The positive tone of the RBA and the decision to leave rates unchanged at 2.5% bolstered the ‘Aussie’.

New Zealand Dollar

The New Zealand Dollar advanced for a sixth consecutive day against the US Dollar and made gains against the Pound and Euro as investors await today’s report which is forecast to show that unemployment in the South Pacific nation fell to its lowest-level in four years.

Canadian Dollar

 The Canadian Dollar ended yesterday’s session stronger but is expected to remain range bound for most of the week due to a lack of key domestic data releases. That could change on Friday however as the latest unemployment figures for the North American nation are to be published.

South African Rand

The Rand fell from its highest-level in three-weeks yesterday after data showed that unemployment was rising in South Africa. Data showed that the nation’s jobless rate edged higher to 25.25% in the first quarter of 2014. The currency remains under pressure from the ongoing strife in the nation’s platinum mining sector. The strike now looks likely to drag on for a sixteenth consecutive week.

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Pound Sterling

The Pound reached its highest level in five years against the US Dollar yesterday after data showed that UK manufacturing activity picked up in April and employment in the sector increased for a twelfth consecutive month. The data was just the latest in a string of positive UK data releases and caused investors to increase their bets that the Bank of England will raise interest rates sooner-than- forecast. In the afternoon Sterling eased slightly following the publication of a better-than-expected US manufacturing report from the ISM.

US Dollar

The US Dollar has firmed against most of its peers as investors await the release of eagerly anticipated nonfarm payrolls data which is expected to show that the USA’s labour market is recovering. The currency also continued to find support from yesterday’s better-than-forecast ISM manufacturing PMI data.

 The Euro

The Euro is weaker against the Pound as investors speculate over whether the European Central Bank will introduce easing measures at next week’s policy meeting. Strong manufacturing data out of the UK also weighed upon the Euro. Today’s key unemployment data is forecast to show that the jobless rate in the Eurozone held at 11.9% in March. If the data comes in worse-than-expected we could see the currency fall.

 Australian Dollar

The ‘Aussie’ is holding steady against most of its major peers due to a lack of domestic data and as investors look ahead to the afternoon’s US employment data. Traders will also be looking ahead to next Tuesday when the Reserve Bank of Australia delivers its latest interest rate decision. The Bank is expected to leave interest rates unchanged.

New Zealand Dollar

The New Zealand Dollar is expected to see little movement this morning due to a lack of domestic data releases and as traders await the publication of the US nonfarm payroll report due out later in the session.

Canadian Dollar

The Canadian Dollar weakened against the Pound and other peers yesterday after a Canadian manufacturing PMI report came in below forecasts. PMI came in at 52.9 for April, down slightly from March’s figure of 53.3 and was worse than the fall to 53 expected by economists. The currency is likely to experience movement later in the session due to the release of today’s US jobs data.

 South African Rand

The Rand fell against a number of peers as demand for riskier assets fell following an escalation of tensions in Ukraine. Pro-Russian separatists shot down two Ukrainian helicopters killing one pilot and wounding another. As elections draw closer expectations of a possible Russian intervention have increased. An ongoing strike in the South African Platinum mining sector is also weighing upon sentiment towards the Rand.

Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.

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Buyers and sellers of European property are reportedly holding off from making any transactions because of the continued uncertainty over the direction of the sterling/euro exchange rate.

There is almost an equal amount of evidence to support both currencies seeing increased strength in the near future. So it is understandable the both sides are waiting.

“A lot of investors are sitting tight at the moment as no one’s really certain what will happen,” says Tom Holian, a dealer at Foreign Currency Direct.