With a data-heavy day ahead, we forecast that notable foreign exchange rate movement will take place over the next few hours.
Pound Sterling (GBP) Exchange Rate Forecast
The Pound was able to recover some of its recent losses on Monday as the UK published a moderately better-than-forecast UK Construction PMI report. While the gauge did soften from its previous high, it still showed impressive growth and encouraging levels of employment in the UK construction sector. Today’s UK Services PMI is expected to have climbed from 57.7 in June to 58 in July, pushing further above the 50 mark separating growth from contraction. If the report comes in at or above this forecast level the Pound Sterling (GBP) exchange rate could extend yesterday’s gains.
Australian Dollar (AUD) Exchange Rate Forecast
After advancing against the majority of its currency counterparts as the week kicked off, the Australian Dollar moderated its gains as trading continued. The South Pacific currency had been boosted by a stronger-than-anticipated Australian retail sales increase but advances were tempered by an easing in China’s Non-Manufacturing PMI. The Reserve Bank of Australia’s interest rate decision could trigger extensive Australian Dollar movement during the local session. If the RBA dwells on how ‘overvalued’ the domestic currency is, ‘Aussie’ losses are likely to follow the announcement. Australia’s AiG Performance of Services Index and Trade Balance figures will also be worth noting.
New Zealand Dollar (NZD) Exchange Rate Forecast
With New Zealand’s employment figures due out later today, the New Zealand Dollar (NZD) exchange rate could trend in a narrow range against its currency rivals. That being said, the commodity-driven currency may fluctuate in response to news from New Zealand’s two main trading partners, Australia and China. China’s HSBC Services/Composite PMI will therefore be of note, as will the Reserve Bank of Australia’s interest rate announcement.
Euro (EUR) Exchange Rate Forecast
The Euro broadly softened on Monday as investors reacted to a disappointing Sentix Confidence Index for the currency bloc and focused on the European Central Bank’s (ECB) upcoming policy meeting. The common currency could recoup declines over the next few hours if the Eurozone’s retail sales report shows the sales growth projected.
Indian Rupee (INR) Exchange Rate Forecast
Although the Indian Rupee was trending in a slightly weakened position against the Pound, the emerging market asset was able to recover ground against the US Dollar. The Rupee gained on the ‘Greenback’ for the first time in eight days, climbing by 0.4% as Friday’s slightly disappointing US Non-Farm Payrolls report took a toll on the US Dollar’s appeal.
UPDATED: 09:45 GMT 05 August, 2014
RBA Decision, UK Data Cause Currency Movement
Pound Sterling Exchange Rate Update
The Pound Sterling exchange rate strengthened against the majority of its currency counterparts following the release of considerably stronger-than-anticipated Services data for the UK. The news that the Markit Services PMI jumped to an eight-month high in July is likely to keep the Pound buoyed throughout the local session.
Australian Dollar Exchange Rate Update
The Australian Dollar exchange rate closed the Australasian session trending higher against several of its peers as the Reserve Bank of Australia left fiscal policy unaltered and refrained from talking down the ‘Aussie’ in its accompanying policy statement. China’s slightly disappointing services PMI tempered the Australian Dollar’s gains somewhat.
UPDATED 15:40 GMT 06 August, 2014
Pound (GBP) Sheds Gains, Euro (EUR) Struggles
On Thursday several of the major currencies experienced movement as a result of mixed economic reports.
The Pound Sterling (GBP) exchange rate posted notable losses against several of its main currency counterparts following the release of less-than-spectacular UK Shop Price and Manufacturing Production figures.
Meanwhile, the Euro (EUR) exchange rate slumped to fresh lows against the US Dollar after Italy was shown to have eased back into recession in the second quarter.
The US Dollar (USD), on the other hand, put on a stellar performance as US reports continued to impress. US Trade Data came in above forecast and domestic Mortgage Applications increased by considerably more than anticipated.
With two central bank decisions taking place tomorrow and US Jobless Claims figures on the horizon, further exchange rate movement is likely.
UPDATED 09:10 GMT 07 August, 2014
Australian Dollar (AUD) Plummets, US Dollar (USD) Bullish
As the week continued the Australian Dollar (AUD) exchange rate broadly softened in reaction to considerably worse-than-anticipated employment data for Australia.
The news that Australia’s unemployment rate surged to a 12-year high in July left the ‘Aussie’ floundering against the majority of its currency counterparts.
The result undermines the argument in favour of the Reserve Bank of Australia considering an interest rate increase in early 2015.
Meanwhile, the US Dollar (USD) exchange rate remains buoyant. The ‘Greenback’ consolidated gains against several of its most traded peers yesterday as the US trade data surpassed expectations.
Exchange rate volatility could be caused by the Bank of England and European Central Bank interest rate decisions as well as the US Initial Jobless and Continuing Claims figures.
Stay tuned for all the latest exchange rate news and future currency forecasts!
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