Daily Currency update – 02nd May 2014

Daily Currency update – 02nd May 2014

0 3966
foreign currency

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.