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?Kiwi? on Downturn as Dairy Production Concerns are Raised with Pound also Faltering Today after Unimpressive UK GDP Data

Published: 28 Aug at 1 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany, Greece,

Pound Sterling
A significant improvement on the UK Consumer Confidence Survey for August this morning, with the index rising to 7 rather than remaining static at 4, was ultimately of limited influence on Sterling as it was soon eclipsed by the release of as-expected GDP figures. Less impressive than might have been hoped, this was enough to send the Pound into a downtrend against the majors today as faith in the UK economy has consequently wavered further.

Ahead of the afternoon’s crucial German Consumer Price Index figures the single currency is experiencing an uptick across the board, shaking off the dovish influence of European Central Bank (ECB) Executive Board Member Peter Praet’s comments on the possibility of interest rate cuts. With an interim government also being sworn in for Greece today the Euro could be on the cusp of further turbulence as attention returns to concerns over the Hellenic nation and its ability to abide by the bailout conditions agreed with creditors.

US Dollar
After a relatively mixed bag of economic data on Thursday the ‘Greenback’ is failing to gather significant steam against rivals in spite of the Dow Jones having now recouped all of the week’s earlier losses. Although the domestic GDP and Personal Consumption either as-expected or above forecast both the Continuing Claims and Pending Home Sales posted substantial shortfalls. Painting a less positive than hoped picture of the US economy these figures prevented the ‘Buck’ from gaining bullishly even as the speculation over potential Fed rate loosening begins to simmer down.

Australian Dollar
As the influence of Black Monday continues to recede the commodity bloc has naturally been boosted by a clear decrease in trader risk aversion. With the prices of copper and zinc in particular having posted their largest single day rises in over two years yesterday Australia’s economic prospects are certainly beginning to look up somewhat. Nevertheless the ‘Aussie’ remains relatively sluggish today with the strengthening of other majors.

New Zealand Dollar
While the stabilising state of the global economy has lifted some weight from the ‘Kiwi’ the South Pacific currency has since suffered a blow in optimism. Prominent dairy producers yesterday warned that the GlobalDairyTrade auction may return to a general downtrend in values as supply continues to outstrip demand. This suggestion that New Zealand’s key export industry may well be expected to experience significant contraction for the foreseeable future has naturally dampened attitudes towards the currency again.

Canadian Dollar
Another day of strong trading for oil has seen the ‘Loonie’ buoyed further across the board, with the closure of two large pipelines in Nigeria having once again raised the prospect of a decrease in the industry’s supply surplus. While the global glut remains a prominent threat, with rival producers showing no sign of tailing off production, Brent and US crude have continued to inch up in value to $48.25 and $42.21 respectively. After yesterday saw oil rise by 10%, its single biggest gain in six years, however, the Canadian Dollar remains in a relatively strengthened positon.
As of Friday, 28th August 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3762, GBP USD exchange rate was 1.5391, GBP AUD exchange rate was 2.1456, GBP NZD exchange rate was 2.3808, and GBP CAD exchange rate was 2.0318.
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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