Pound Sterling (GBP) Exchange Rate Bolstered by BoE Minutes
Following this morning’s Bank of England (BoE) meeting minutes the Pound has experienced a positive rise across the board despite the members of the Monetary Policy Committee (MPC) unanimously voting to maintain the current level of interest rates. Assessment of the minutes has led to speculation that this may in fact be the last occasion on which all nine members vote in accordance, with the prospect of a rise on the horizon encouraging more hawkish trading on most fronts. With the minutes counteracting the concerns raised by Tuesday’s announcement of an additional 20 billion Pounds worth of spending cuts by Chancellor of the Exchequer George Osborne, the Pound has recovered its previous decline against peers such as the Euro (GBP/EUR) and Australian Dollar (GBP/AUD).
Euro (EUR) Falls Ahead of Greek Vote on Reform Measures
Although the recent stabilisation of the Greek situation has improved the prospects of the Euro, the common currency has seen a fall against both the Pound and US Dollar today. The BoE meeting minutes and their boost to the Pound are probably the main cause of this. However a vote by Greek MPs on economic reforms due later this evening could potentially have a significant impact on rates. Approval of these measures by parliament would the next step towards securing the much-needed 86 billion Euro bailout and would help ease concerns with regards to the Eurozone’s future health.
US Dollar (USD) Exchange Rate Holding Steady Ahead of Housing Data
With the US MBA Mortgage Applications figure, House Price Index for May and Existing Home Sales for June all due out later today, movement seems inevitable for the US Dollar. Although the BoE meeting minutes showed that all policymakers opted to hold steady on interest rates in June, the Pound Sterling to US Dollar (GBP/USD) exchange rate has seen a rise, although trading remains in a relatively narrow range. The ‘Greenback’ has nevertheless registered increases against several key currencies, including the Euro (USD/EUR) and the Canadian Dollar (USD/CAD).
Australian Inflation Rate Rises but ‘Aussie’ (AUD) Declines
Softening against many of its rivals today, the ‘Aussie’ has been unable to take advantage of the improvement in inflation rates revealed in the second quarter data. Rising from 1.3% to 1.5% year-on-year, the annual rate nevertheless fell short of the 1.7% forecast.. With the increase in inflation not expected to have much of an impact on the Reserve Bank of Australia’s policy outlook, the Australian Dollar is expected to continue declining in the wake of this report.
‘Kiwi’ (NZD) Maintains Downwards Trend before RBNZ Announcement
Continuing to lose ground against its peers, the New Zealand Dollar is waiting on the Reserve Bank of New Zealand’s rate decision, duet later today. A decrease in interest rates, widely forecast to be the likely outcome, is expected to push the currency’s value lower. Dairy price slumps alongside flagging domestic inflation have led to a downward trend in the currency so far this year and the ‘Kiwi’ seems unlikely to recover from this any time soon, even if a more positive result from the decision were to occur.
Canadian Dollar (CAD) Exchange Rate Stays Bearish after BOC Rate Cut
This week the Canadian Dollar remains trending at a loss against many of its common trading partners, sticking near landmark lows. The relative strength of the Pound has cemented the GBP/CAD exchange rate at its six-year high while the US Dollar to Canadian Dollar (USD/CAD) rate equally remains trending bullishly.
ZAR/USD Exchange Rate Remains Strong
Ahead of Thursday’s interest rate decision by the South African Reserve Bank, the Rand has remained trading relatively steadily. A recovery in commodity prices helped strengthen the South African Rand to US Dollar (ZAR/USD) exchange rate yesterday and the result of the central bank announcement could potentially see a greater boost to this trend.