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US Dollar (USD) Bullish; Euro (EUR) Precarious; ?Aussie? (AUD) Slumps

Published: 8 Aug at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Italy, Russia, South Africa,

Pound (GBP)

The Pound (GBP) is presently trading up versus the US Dollar (USD) at 1.6819, and against the Euro (EUR) at 1.2554. Friday will see the publication of UK Construction Output and Trade Balance figures, which are forecast to prove favourable. The first half of next week will be quiet by way of UK data publishing; however, Wednesday will see Jobless Claims Change, Average Weekly Earnings, Unemployment Rate, Employment Change and Claimant Count figures come to light. Meanwhile Friday will be highly influential for the Pound with Gross Domestic Product statistics released. Thursday saw the Bank of England (BoE) maintain their current stance on interest rates at 0.50, causing disappointment for the Pound.

Euro (EUR)

The European Central Bank (ECB) announced the decision to maintain the current monetary policy of 0.15% interest rates on Thursday, following weak Eurozone data which indicates Italy has entered recession. However, the Eurozone’s recovery appears fragile and is now continually threatened by the ramifications of political disputes occurring in Russia and Ukraine. Expert in the field Valentin Marinov commented: ‘The fundamentals for a weaker exchange rate are better than they were two of three months ago. Markets have perceived that monetary policy in the Euro area and the US are, and are going to stay on diverging paths for a long time.’ The present Euro to US Dollar (USD) exchange rate rests at 1.3394, whilst the Euro to Pound (GBP) currency pairing is residing at 1.3394.

US Dollar (USD)

The US Dollar (USD) has reached session highs of 0.5953 against the Pound (GBP) and 0.7495 versus the Euro (EUR). US data surprised yesterday with the release of lower than forecast Initial Jobless Claims figures which only reached 289K in comparison to the predicted 304K. However Continuing Claims figures reached 2518K, despite only being expected to attain 2512K. This week has seen the US Dollar trading at its highest level in nearly a year, following popularity in the currency market from positive data releases and anticipation for the Federal Reserve to raise interest rates.

Canadian Dollar (CAD)

The Canadian Dollar (CAD) is currently trading against its US Dollar (USD) counterpart at 0.9158 on Friday, near the session high of 0.9163. Wednesday gained some positivity for the ‘Loonie’ by way of the International Merchandise Trade Balance which surprised economists, bypassing the 0.00B forecast, instead attaining a positive 1.86B. Furthermore Thursday saw the publication of better-than-expected Purchasing Managers Index figures which attained a favourable 54.1 in July, despite economists’ forecasts of 53.0. However the ‘Loonie’ is tentatively trading in the currency market with pressures from global political conflicts regarding Russia and Ukraine affecting trading in the currency market.

Australian Dollar (AUD)

The Australian Dollar (AUD) is trading at 0.9253 versus the US Dollar (USD), whilst trending at 1.0940 against its New Zealand Dollar (NZD) counterpart. The ‘Aussie’ however has sunk to its lowest point in the latter two months, following a disappointing week for the Australian economy. As President of the United States Barack Obama has authorised air strikes in Iraq, the Australian commodity currency has felt the pressures of geopolitical tensions as investors seek safe haven currencies such as the US Dollar. Expert in the field David de Ferranti commented: ‘If we see tensions surrounding the Middle East or Ukraine escalate, the “Aussie” could face further pressure in the short term.’

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) has slipped in the currency market of late, currently trading at 0.8452 against the US Dollar (USD). However, following the recent European Central Bank (ECB) decision this week to continue with low interest rates in the Eurozone, the ‘Kiwi’ has been able to gain some ground against the Euro (EUR). The NZD to EUR exchange rate is presently residing between the ranges of 0.6308 and 0.6343. Forex expert Kymberly Martin stated: ‘Commentary from ECB President [Mario] Draghi helped inspire a weaker Euro.’

South African Rand (ZAR)

Next Wednesday will see the release of South African Retail Sales figures which have been forecast by economists to prove favourable for the South African economy. The Rand is recovering from seven months of striking in 2014, with meetings today scheduled to finalise the disputes lingering from the last National Union of South Africa Metal Workers (NUMSA) strike. Although most members from the strike have been able to return to work, some have been, and are currently, locked out by employers of the National Employers Association of South Africa (NEASA) in protest of the latest deal agreed upon. NUMSA spokesperson Vuyo Lufele stated: ‘Some of the employers are really seeing this as unjust for the workers. They can’t just follow NEASA’s position while they’ve got workers who they have had a relationship with for quite some time.’ The US Dollar (USD) is currently trending in the region of 10.8180 versus the South African Rand (ZAR).
As of Friday, 8th August 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2506, GBP USD exchange rate was 1.6772, GBP AUD exchange rate was 1.8081, GBP NZD exchange rate was 1.9821, GBP CAD exchange rate was 1.8402, GBP RUB exchange rate was 60.7024, and GBP ZAR exchange rate was 17.8869.
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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