A run of economic reports caused extensive market movement on Tuesday and several currencies are still feeling the repercussions.
Pound Sterling (GBP) Exchange Rate Forecast
A stronger than anticipated jump in the UK’s Services PMI allowed the Pound Sterling exchange rate to strengthen by over 0.3% against the Euro yesterday. The British currency also adopted a stronger position against peers like the Australian Dollar and South African Rand but failed to rally against a bullish US Dollar. The UK’s measure of the services sector achieved an eight-month high in July, helping to make up for last week’s slightly less inspiring manufacturing figure. With UK Manufacturing and Industrial output figures scheduled for publication today, and the nation’s NIESR GDP estimate for July also on the horizon, the Pound Sterling (GBP) is likely to experience movement.
Australian Dollar (AUD) Exchange Rate Forecast
The Australian Dollar extended gains against several of its rivals yesterday as the Reserve Bank of Australia opted to leave interest rates on hold. The central bank also refrained from altering its exchange rate rhetoric, which proved ‘Aussie’ beneficial. An improvement in the AiG’s Performance of Services index also helped lend the Australian Dollar support, although gains were limited by a softening in China’s own Services gauge. Although there are no notable Australian reports to be aware of on Wednesday, economists will be looking ahead to tomorrow’s highly influential Australian employment figures.
Canadian Dollar (CAD) Exchange Rate Forecast
With Canadian economic data lacking, the price of crude oil falling, and the economic performance of the US outstripping that of its neighbour, the Canadian Dollar fell to a three-week low against the US Dollar on Tuesday. According to foreign exchange strategist Greg Anderson; ‘General risk-off sentiment has people buying U.S. dollars. Normally when the dollar rallies, the Canadian dollar is somewhere in the middle of the pack. Today, it was towards the bottom of the pack.’ Market moving data for Canada is lacking until Friday, but global economic developments could influence the direction taken by the commodity-driven ‘Loonie’.
Euro (EUR) Exchange Rate Forecast
Although Retail Sales data for the Eurozone showed the strongest year-on-year climb in sales for seven years in June, the Euro was trending lower against the Pound and US Dollar on Tuesday. The common currency was feeling the pressure ahead of Thursday’s European Central Bank interest rate decision. While the ECB isn’t expected to alter policy this time out, the central bank may offer more guidance regarding the introduction of quantitative easing style stimulus. If it seems as though QE is on the horizon the Euro could fall.
UPDATED 08:45 GMT 06 August, 2014
New Zealand Dollar (NZD) Exchange Rate Forecast
The New Zealand Dollar (NZD) exchange rate broadly softened during the Australasian session as New Zealand was shown to have added less jobs than forecast during the second quarter of the year. Employment was up 0.4% on the quarter, less than the 0.7% increase anticipated. Although the nation’s unemployment rate fell to 5.6% in the second quarter, the decline was largely due to an unanticipated fall in the participation rate. The Pound Sterling to New Zealand Dollar exchange rate was trending over 0.2% lower as European trading began.
Stay tuned for all the latest exchange rate news and future currency forecasts!
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