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FX Outlook: Australian Dollar (AUD) Steady before RBA Decision

Published: 2 Feb at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, France, Germany, Greece,

Pound Sterling
The UK’s Manufacturing PMI might have improved by more than expected in January, but the Pound failed to benefit. The British currency remained trading lower against both Euro and the US Dollar after the data was published as delayed BoE rate hike expectations and political pressures took a toll on Sterling.

US Dollar
Ahead of the release of the US ISM Manufacturing Index, the US Dollar advanced on the Pound. The ‘Greenback’ was slightly softer against the Euro and if today’s manufacturing report shows the decline expected, the US Dollar could extend losses this afternoon.

Although the final French and Germany manufacturing PMI’s for January were negatively revised, hopes that Greece will reach an accord with its creditors (preventing a Grexit) lent the Euro support. The common currency could fluctuate tomorrow following the release of the Eurozone’s Producer Price Index.

Australian Dollar
A surprising slide in China’s manufacturing PMI drove the ‘Aussie’ lower against the US Dollar and Pound over the weekend. However, the commodity-driven asset later advanced ahead of the Reserve Bank of Australia’s interest rate decision. If the central bank refrains from cutting borrowing costs, the Australian Dollar could surge.

New Zealand Dollar
With this week’s New Zealand employment data expected to show improvement, the ‘Kiwi’ advanced modestly on several of its peers. The currency was also supported by the expectation that dairy prices will increase at the next GlobalDairyTrade auction.

Canadian Dollar
On Friday the Canadian Dollar dropped to a six-year low against the US Dollar in response to concerning Canadian growth figures and further weakness in oil prices. While this week’s domestic data could impact the ‘Loonie’, currency shifts are more likely to be the result of fluctuations in the commodities market.
As of Monday, 2nd February 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3251, GBP USD exchange rate was 1.5027, GBP AUD exchange rate was 1.9268, GBP NZD exchange rate was 2.0582, GBP CAD exchange rate was 1.8909, and GBP CNY exchange rate was 9.4061.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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