Published: 2 Apr at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Cyprus, Australia, New Zealand, USA, Canada, China, Germany, Italy, Japan,
GBP/EUR â€“ Hit two-month high
The fiscal crisis in Cyprus and continuing political uncertainty in Italy
caused the Euro to broadly soften yesterday, allowing the Pound to briefly achieve a two-month high against its common-currency rival. Sterlingâ€™s advance occurred even after data confirmed that the UK economy shrank in the fourth quarter of last year, upping the odds of the nation slipping into another recession. Although the Pound could benefit from a housing report showing the first annual house price increase for over a year, developments in the Eurozone will dominate GBP/EUR movement in the hours ahead.
USD â€“ Broadly Strengthening
The US Dollar posted gains against the majority of its most traded peers as concerns regarding the reopening of Cypriot banks pushed investors away from higher-risk assets and towards the safety of the â€˜Greenbackâ€™. Risk-aversion was also heightened by Italyâ€™s inability to form a coalition government. Banks in Cyprus have now been closed for nearly two weeks and, in an attempt to prevent runs when they reopen, a withdrawal limit of 300 Euros has been set. The reaction of the Cypriot people to this situation is likely to cause significant volatility in the market today.
EUR/USD â€“ Fluctuating
Although investors are bracing themselves for the reopening of Cypriot banks after nearly two weeks the Euro was able to record a modest advance against the US Dollar this morning after German retail sales increased in February. The surprise 0.4 per cent advance defied economistâ€™s expectations for a decline of 0.6 per cent. Despite this report, and the slight Euro gain it inspired, the common currency continues to trade in the region of a four-month low against its American rival as Italian political uncertainty and Cyprus concerns lessen the appeal of riskier assets.
AUD/USD â€“ Trading Lower
As Chinese stocks fell by the most for three weeks the Australian Dollar lost ground, declining against its safe-haven counterparts the US Dollar and Japanese Yen. Ongoing fears regarding Cyprusâ€™ bailout and the uncertain political situation in Italy also contributed to the decline of riskier assets like the â€˜Aussieâ€™. The Australian Dollar experienced little additional movement after the nationâ€™s statistics bureau revealed that private sector credit rose by 0.2 per cent â€“ slightly less than forecast.
NZD/USD â€“ Little Changed
Although the New Zealand Dollar fell against the Japanese Yen during local trade it was largely unchanged against the â€˜Greenbackâ€™, trading in the region of 83.67 US cents. The â€˜Kiwiâ€™ declined against several of its peers after Chinese stocks declined and risk appetite was tempered by developments in the Eurozone. With Cypriot banks reopening in a few hours time, and European/US/Australian markets closed for the Easter break tomorrow, the New Zealand Dollar could experience movement over the course of the day.
CAD/USD â€“ Fluctuating after achieving one-month high
The â€˜Loonieâ€™ rose to a month-high against the US Dollar yesterday after the publication of Canadian CPI figures. The report, compiled by Statistics Canada
, revealed the most significant price gain for 20 years with consumer prices increasing to 1.2 per cent. The unexpected result allowed the Canadian Dollar to climb against the majority of its most traded currency rivals, but the â€˜Loonieâ€™ later fluctuated against its US counterpart as Eurozone concerns weighed on the market.
As of Tuesday, 2nd April 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1779, GBP USD exchange rate was 1.5106, GBP AUD exchange rate was 1.4453, GBP NZD exchange rate was 1.7947, GBP CAD exchange rate was 1.5326, GBP CNY exchange rate was 9.3639, and GBP JPY exchange rate was 141.0439.