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Currency Forecast – RBA, Fed and BoE Inspiring AUD, USD, GBP Movement

Live Currency Exchange Rates
  • Pound mixed vs. EUR, USD – Carney’s comments in focus
  • Eurozone PMIs Impress – Euro sees little benefit
  • US Dollar broadly stronger – Fed speeches ahead
  • AUD lower after RBA minutes – Odds of rate hike fall

Pound Sterling (GBP) 

After sliding at the tail end of last week in response to poor UK retail data, the Pound staged something of a recovery against the Euro on Monday as Greek debt crisis concerns weighed on the common currency.

Sterling was also supported by the expectation that the House of Lords might push for amendments to be made to the Brexit bill. Ahead of BoE Governor Mark Carney’s speech to the UK Parliament, the Pound dipped by 0.3% against the US Dollar. The interbank GBP/EUR exchange rate remained above the 1.17 level. If Carney indicates that UK borrowing costs aren’t likely to increase for the foreseeable future the Pound has the potential to fall as the European session progresses.

Euro (EUR) 

The Greek debt crisis has been casting a shadow over the Eurozone for years now, but fresh concerns over the outlook for the indebted nation kept the Euro under pressure at the beginning of the week.

Although the preliminary Manufacturing, Services and Composite PMIs for the Eurozone proved stronger-than-forecast, the data failed to give the Euro a lift on Tuesday.

US Dollar (USD) 

US Dollar movement was restrained on Monday with US markets closed for a public holiday, but the currency later gained as investors looked ahead to a busy week of speeches from Federal Reserve officials.

If the commentary increases the odds of the Federal Reserve increasing interest rates in March, we can expect USD exchange rates to exhibit further strength.

Canadian Dollar (CAD) 

The Canadian Dollar dropped to a two week low against the US Dollar on Tuesday, also recording losses against the Euro, Australian Dollar and Japanese Yen. With Canadian data in short supply in the hours ahead, any additional ‘Loonie’ movement is likely to be the result of risk appetite and oil price movements.

Australian Dollar (AUD) 

The publication of the minutes from the last Reserve Bank of Australia (RBA) policy meeting left the ‘Aussie’ trading lower across the board.

The minutes highlighted weaker-than-expected growth and dwelt on the negative impact of a stronger domestic currency. Such comments quashed hopes of an RBA rate hike and saw the interbank GBP/AUD exchange rate advance.

New Zealand Dollar (NZD) 

Dairy price news and today’s speech from BoE Governor Mark Carney are likely to be the main causes of GBP/NZD exchange rate movement today, with the pairing currently trending up slightly from the day’s opening levels. Higher dairy prices are liable to give NZD a boost.

Looking ahead, NZD could experience modest movement during the Australasian session as New Zealand’s latest credit card spending figures are published.