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US Dollar (USD) Bullish, Euro (EUR) Enjoys Fleeting Gains, Pound (GBP) Awaits Data

Published: 28 Jul at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Russia, South Africa,

Pound (GBP)

The Pound (GBP) saw an interesting day on Thursday with UK Retail Sales data failing to meet economists’ forecasts. However, the figures showed a more than ten-year high in sales growth in the second quarter as a whole. Friday will be an influential day for the Pound as Gross Domestic Product figures are released. The GDP data is expected to show growth of 0.8% in Q2 quarter- on- quarter and a rise of 3.1% year-on-year. The Pound has been trading strongly in the currency market in recent months, causing concern among some economists. Industry expert Rex Baynton stated that the Pound: ‘Seems to be increasing month on month without slowing down.’ If the UK produces more favourable data, the speculation surrounding interest rate hikes by the close of 2014 will rise. The Pound is presently trending at 1.6977 against the US Dollar (USD).

Euro (EUR)

The Euro (EUR) is caught amid geopolitical tensions as sanctions against Russia are decided upon. However as the situation worsens and Russia disputes the allegations, the Euro remains volatile. The Russian Ambassador has commented that such sanctions are: ‘Illegal, unreasonable and counter-productive.’ However the Single Currency saw surprisingly good data on Thursday, which allowed the Euro to climb from its recent lows. Furthermore, the gains the Euro has made are most likely to prove fleeting as global situations escalate. The Euro has reached highs of 1.3476 against the US Dollar thus far on Friday.

US Dollar (USD)

The US Dollar (USD) gained strength yesterday as unemployment data bettered economists’ forecasts, attaining an eight year low for initial jobless claims. With such favourable data the ‘Greenback’ climbed against other majors including bullish currencies like the Pound (GBP). Expert in the field Joe Manimbo commented: ‘Fewer jobless claims and higher US Treasury yields helped the “Greenback” continue its steady march higher.’ The US expects to see favourable results today by way of Durable Goods Orders figures. The US Dollar to Pound exchange rate currently lies in the region of 0.5886.

Canadian Dollar (CAD)

The Canadian Dollar (CAD) is currently trading at 0.9307 against the US Dollar (USD) in the currency market after a quiet week by way of data releases for Canada. Retail Sales figures showed growth of 0.7% month- on- month in May, despite being forecast to only attain 0.6%. Furthermore the ‘Loonie’ has been influenced by the positive figures from Europe and China regarding metal prices and PMI data. With rising geopolitical tensions following the Ukraine and Russia situation, oil prices have risen and provided some additional support for the Canadian Dollar.

Australian Dollar (AUD)

The Australian Dollar had a highly significant week with positive Chinese figures announced, allowing it to escape the 93 cents region against the US Dollar (USD), to remain firmly within the 94 cents territory. However, although the Australian Dollar saw a boost mid-week, the ‘Aussie’ is currently trading lower after US unemployment data surprised on Thursday. Westpac representative Robert Rennie commented: ‘A stronger [US] Dollar just makes it harder for the “Aussie” to push much higher.’ The Australian Dollar is currently in the region of 0.9407 versus the US Dollar, rising to highs of 0.9424 so far this session.

New Zealand Dollar (NZD)

The New Zealand Dollar has proven bullish in the currency market in recent months, however, the ‘Kiwi’ has dropped in the latter half of this week, after the Governor of Reserve Bank of New Zealand, Graeme Wheeler, stated he believed the currency was set to drop. He described the New Zealand Dollar’s strength as both ‘unjustified’ and ‘unsustainable’ making the currency less attractive to investors. New Zealand raised their interest rates this week by 0.25 basis points to 3.50%, however further interest rate movement looks limited in the near future. The ‘Kiwi’ is currently trading at 0.8565 against the US Dollar (USD).

South African Rand (ZAR)

The South African Rand (ZAR) has been subject to volatility this year, with a prolonged five- month platinum mining strike, followed by a metal workers strike. Friday morning showed the Rand remaining sturdy against the US Dollar. However with the announcement that strikes are set to continue as workers rebuffed conditions of the latest deal from employers—despite being satisfied with the most recent wage offer—the Rand is likely to remain weak. A union representative commented: ‘The strike will continue because we have problems with changing section 37.’ The US Dollar (USD) is presently trading against the Rand at 10.5230.
As of Monday, 28th July 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2637, GBP USD exchange rate was 1.6982, GBP AUD exchange rate was 1.8057, GBP NZD exchange rate was 1.9874, GBP CAD exchange rate was 1.8343, GBP CNY exchange rate was 10.5076, GBP RUB exchange rate was 60.1606, and GBP ZAR exchange rate was 17.9359.
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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