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New Zealand Dollar (NZD) Softened by Disappointing Dairy Result, Canadian Dollar (CAD) Strengthens in spite of Oil Worries

Published: 16 Feb at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany, Russia,

Mixed Inflation Data sees GBP Turn Bearish

Although the Pound initially saw a boost on the back of the latest Consumer Price Index report, thanks to a modest uptick of 0.3% in baseline inflation, the currency has since turned increasingly bearish. As the core CPI showed a larger dip than expected and inflation remains a long way from the Bank of England’s (BoE) 2% target confidence in Sterling has remained weak, particularly as ‘Brexit’ concerns continue to hang over markets.

EUR Climbs Despite Weakened Economic Sentiment

While the February ZEW Economic Sentiment Surveys demonstrated that confidence within Germany and the wider Eurozone slipped substantially on the month this has failed to particularly weigh on the Euro today. For the most part investors appear reassured that the decline was not quite as sharp as forecast, prompting the single currency to take back some of its earlier losses.

USD Boosted by Safe-Haven Demand

Despite stock markets having started the day on a strong rally safe-haven demand has seen a resurgence on Tuesday afternoon as trader confidence falters. The US Dollar has consequently climbed against rivals, in spite of the latest Empire Manufacturing Survey offering evidence that the US economy is continuing to struggle amidst global slowdown pressures.

Fresh Oil Slump Fails to Dent CAD

The Canadian Dollar has been on somewhat mixed form today, with stronger Existing Home Sales and Manufacturing Shipments figures providing fresh incentive for traders to favour the currency. Meanwhile, though Saudi Arabia, Russia, Qatar and Venezuela formed an agreement to freeze production at January levels the lack of a cut and conditional nature of the deal has prompted Brent crude to return to a downtrend.

AUD Strengthens after Less Dovish RBA Minutes

Demand for the Australian Dollar increased in response to the latest Reserve Bank of Australia (RBA) meeting minutes, as policymakers proved somewhat less dovish than investors had expected. While the central bank maintains an easing bias the discussion nevertheless failed to dwell on Chinese slowdown concerns, suggesting that the RBA is not likely to cut interest rates soon.

Disappointing Dairy Result Softens NZD

Dairy prices continued to decline at today’s GlobalDairyTrade auction, substantially denting the appeal of the New Zealand Dollar as this was the fourth session in a row to show a drop. As global demand continues to weaken the New Zealand economy seems increasingly under pressure, prompting speculation that the Reserve Bank of New Zealand (RBNZ) may imminent loosen monetary policy in response.
As of Tuesday, 16th February 2016, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2835, GBP USD exchange rate was 1.4303, GBP AUD exchange rate was 2.0096, GBP NZD exchange rate was 2.1735, GBP CAD exchange rate was 1.983, GBP CNY exchange rate was 9.3208, and GBP RUB exchange rate was 111.8758.
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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