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Tue 11 Aug 2020 07:03GMT

AUD NZD Bullish with Fresh Commodity Price Rally, US Dollar Weighed Down

Published: 7 Oct at 1 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, France, Germany, Italy,

Pound Sterling
Spurred to gains by a positive note in the International Monetary Fund (IMF) global economic growth forecast, the Pound has been further supported today by an unexpectedly strong performance on UK Industrial Production. Surpassing expectations of 1.2% growth, the year-on-year figure for August printed at a substantial improvement at 1.9%. Although domestic Manufacturing Production was shown to have been weaker than hoped, contracting by -0.8% instead of -0.2%, this failed to particularly dent sentiment towards Sterling as the currency continued to advance against the majority of rivals.

Euro
Prospects for the single currency have turned dovish once again today, as German Industrial Production was revealed to have underperformed. Following up a weaker than expected domestic Factory Orders figure this has led to renewed worries over the continued progress of recovery within the Eurozone’s powerhouse economy. As the IMF suggested that growth in Germany, France and Italy would remain slow and below 2%, investors are once again questioning the potential need for the European Central Bank (ECB) in loosen monetary policy.

US Dollar
In spite of the US having been forecast to demonstrate the highest growth of the G7 nations in the latest IMF economic report the ‘Buck’ has remained weighed down by wider slowdown concerns and the ever-retreating possibility of a Federal Open Market Committee (FOMC) interest rate hike. As the domestic Trade Balance demonstrated a widening deficit yesterday the ‘Greenback’ has remained decided bearish, with pundits favouring rivals due to this sustained run of disappointing data.

Australian Dollar
As commodity prices have continued to rally in the wake of the decreased odds of an imminent Fed interest rate rise and the agreement of the Trans-Pacific Partnership free trade deal, the ‘Aussie’ has remained on bullish form. Sustained softness of the US Dollar has also helped to keep the antipodean currency buoyed, in spite of the Australian Construction PMI having fallen in September from 53.8 to 51.9.

New Zealand Dollar
Overnight the GlobalDairyTrade auction saw the value of milk solids rise for the fourth consecutive session, a positive sign for the outlook of the New Zealand dairy industry. With risk appetite on the up the ‘Kiwi’ continues to gain ground across the board today, unimpeded by a lack of domestic data and supported by the sustained weakness of the ‘Buck’.
Canadian Dollar
Oil remains on an uptrend today as global glut has shown fresh signs of easing, traders optimistic as the US Energy Information Agency released a forecast that indicated a reduction in the global surplus. Although the Ivey Purchasing Managers Index slipped further than anticipated yesterday, declining from 58 to 53.7, the ‘Loonie’ continues to strengthen against many of the majors.

As of Wednesday, 7th October 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3632, GBP USD exchange rate was 1.5316, GBP AUD exchange rate was 2.1261, GBP NZD exchange rate was 2.3173, and GBP CAD exchange rate was 2.
Patrick James About Author: (289 Posts)Patrick completed his economics degree just as the global financial crisis struck in 2008. In the intervening years Patrick has made his mark, climbing to a prominent position within a large financial services provider. As part of his role Patrick uses his expertise to advise companies of the best ways to safeguard against currency risk.

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