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Wed 3 Jun 2020 06:41GMT

Daily Currency Update: Central Bank Interest Rate Decisions in Focus, FX Movement Expected

Published: 5 Mar at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany,

Pound Sterling
Yesterday’s below-forecast UK Services PMI caused a slight softening in the Pound, and the British asset extended losses against the US Dollar thanks to upbeat ecostats for the world’s largest economy. Today’s BoE interest rate decision is a bit of a non-event and is unlikely to trigger notable Sterling fluctuations.

Euro
A mixed lot of economic reports for the Eurozone (including a very disappointing German Factory Orders figure) left the Euro struggling against most of its rivals. The content of ECB President Mario Draghi’s policy statement will be closely attended to in the hours ahead. Any hawkish remarks could bolster the Euro.

US Dollar
With the ISM Non-Manufacturing Composite index exceeding estimates, the US Dollar advanced on several of its peers on Wednesday. If today’s US initial jobless/continuing claims and factory orders numbers impress, the ‘Greenback’ could climb higher ahead of Friday’s influential US Non-Farm Payrolls report.

Australian Dollar
The ‘Aussie’ gained this week after the RBA left interest rates on hold. However, with the central bank’s deputy governor stressing the negative impact of a buoyant domestic currency and Australian trade balance data falling short of forecasts, the South Pacific currency has since trimmed these initial gains.

New Zealand Dollar
The New Zealand Dollar softened against several of its peers as the Reserve Bank of New Zealand indicated that it intends to tighten lending rules in an attempt to cool the currently overheating property market.

Canadian Dollar
As the Bank of Canada had been expected to introduce another interest rate cut at yesterday’s policy meeting, the central bank’s decision to leave policy unchanged gave the ‘Loonie’ a boost. Today’s Ivey PMI could initiate additional ‘Loonie’ shifts.
As of Thursday, 5th March 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3821, GBP USD exchange rate was 1.5247, GBP AUD exchange rate was 1.9586, GBP NZD exchange rate was 2.036, and GBP CAD exchange rate was 1.9034.
Dominic Lee About Author: (412 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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