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?Aussie? (AUD) Data Disappoints, Pound (GBP) Awaits Figures, Rand (ZAR) Could be Quashed

Published: 10 Jul at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, South Africa,

Pound (GBP)

As the UK eagerly anticipates data publishing today, the Pound still remains bullish in the currency market trading against the US Dollar at 1.7138. However, manufacturers and corporate giants are concerned about how the strong Pound will affect profits made as their sales surge Year on Year. Burberry believes that the strong Sterling will have a ‘material’ impact on profits, speculating that their profits will be reduced by £55m this year. A spokesperson for Burberry, Christopher Baily, stated: ‘We continue to concentrate on the things we can control in an uncertain external environment.’

US Dollar (USD)

The Federal Reserve’s meeting minutes were released late on Wednesday, and has brought disappointment to investors hoping for some insight into US interest rate hikes. Westpac Currency expert, Imre Speizer, said: ‘The market immediately responded, pushing down interest rates in the US, pushing down the US Dollar and therefore pushing up most currencies against the US.’ With speculation in recent weeks about the US Dollar being set to rally, the minutes have caused a dip for the ‘Buck’. The minutes revealed that Federal Reserve bond buying would be halted by the third quarter in 2014.

Euro (EUR)

The Euro has recently been hot topic in the economic market, with economists speculating how strong the Euro can be maintained at in the currency market; the Euro is currently trading at 1.3633 against the US Dollar on Thursday. On Wednesday however, the European Central Bank President, Mario Draghi, stated the desire for different economic reforms for member countries of the Eurozone to impart whilst attempting to cut their economic differences. Draghi stated: ‘Such differences creates the risk of permanent imbalances. With this in mind, I believe that structural reforms in each country are enough of a common interest to justify that they are made subject to discipline at the community level.’

Canadian Dollar (CAD)

The Canadian Dollar is currently trading in the 0.9382 region against the ‘Buck’ showing a consistently strong ‘Loonie’ hovering near the 94 cents region. Whilst speculation occurs as to what exchange rate is feasible for the Canadian Dollar to be maintained at, commodity prices and demand appear to be keeping it strong, most notably from the relationship the ‘Loonie’ has with copper. As copper is currently trading at a four month high, the ‘Loonie’ gains support; previously the copper price fell in the first quarter, causing lows for the Canadian Dollar. Economist Douglas Porter has commented: ‘There are many specific factors that can knock this relationship off course, at least temporarily. But both copper and the ‘Loonie’ tend to ebb and flow with the broader fortunes of the global economy and the appetite for risk. So, the recent rebound in both prices is at least a mild thumbs-up for the global outlook.’

Australian Dollar (AUD)

Australia’s record low interest rates look set to remain in the near future as data has revealed that joblessness in Australia has reached an 11 year high rising to 6%. A Moody’s economist Katrina Ell stated: ‘Australia’s labour market is very gradually healing but employment growth remains below trend.’ Australia needed positive figures to reach expectations of a stronger ‘Aussie’ by the end of the year. The Australian Dollar is currently trading against the ‘Greenback’ at 0.9371

New Zealand Dollar (NZD)

The ‘Kiwi’ has had an exciting week, after Fitch credit rating agency suggested a promotion from stable to positive. However, following the US meeting minutes, the ‘Kiwi’ has advanced to a fresh three year pinnacle reaching 88.29 cents against the US Dollar, the highest exchange rate since August 2011. The Reserve Bank of New Zealand may have hoped for a hawkish report from the Fed in order to drive the US Dollar higher and the ‘Kiwi’ lower in comparison; however this was not the case. Imre Speizer commented: ‘The market might have positioned itself for a hawkish report, didn’t get a hawkish report and then quickly had to take back their speculative positions.

South African Rand (ZAR)

The South African has been quashed by oppressive political tensions recently as strikes have plagued the country. However the South African Rand is trading lower again on Thursday, awaiting mining and factory data, which could cause the Rand to soften even further. After a five month platinum and mining strike, economists have predicted a contraction, however if the figures shrink more than forecast, the Rand could fall sharply. The fall in confidence for the South African economy however is proving to be risky for the Rand. Despite talks being underway to end the current metal workers strike, the strike culture South Africa is forming, is causing problems long term for the investing appeal of large companies which the economy, and therefore the Rand would benefit from. Economist Thabi Leoka stated: ‘South Africa could potentially become a risky country, an unpredictable country. We risk investment going to other places instead of South Africa.’
As of Thursday, 10th July 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2588, GBP USD exchange rate was 1.7129, GBP AUD exchange rate was 1.8237, GBP NZD exchange rate was 1.9429, GBP CAD exchange rate was 1.8245, and GBP ZAR exchange rate was 18.3232.
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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