Weak USD Opens the Door for AUD and NZD Advance
The US Non-Farm Payrolls have once again performed better than expected, with 11k more jobs created that the forecast 200k. The figures have increased the likelihood of the Fed raising interest rates to 80% but the US Dollar is surprisingly bearish, with the high-risk ‘Aussie’ and ‘Kiwi’ strengthening as a consequence.
Earlier…
ECB Exchange Rate Decision Sends AUD, NZD Tumbling
Pound Sterling has been able to appreciate after a stellar performance of the Euro pushed the Australian Dollar and New Zealand Dollar down. Euro activity surged as the European Central Bank (ECB) delivered the minimum expected cut to the deposit rate.
Earlier…
Pound Sterling has been left weak by the Chancellor’s Autumn Statement, mixed PMIs and warnings by the Bank of England (BoE) regarding the housing market. Meanwhile, the Australian Dollar has been pushed higher by strong Gross Domestic Product figures and the New Zealand Dollar is advancing after dairy prices rose.
Pound Sterling (GBP) Currency News: Weak Despite Fast Service Sector Growth
Today’s Markit PMIs for the UK have been much more to investor taste after yesterday’s Construction and Tuesday’s Manufacturing indexes both showed a greater slowdown in growth than expected. Released during today’s London session, the Composite index increased from 55.4 to 55.8, while the Services index showed a four-month high rate of growth, increasing to 55.9. According to Markit, growth in the UK economy is on track to hit 0.6% in Q4.
Despite the positive news, Pound Sterling remains weak thanks to doubts over the UK’s future borrowing which arose after George Osborne’s Autumn Statement. Concerns raised by the BoE regarding the vulnerability of the UK’s buy-to-let market and parliament’s decision last night to launch airstrikes in Syria have all softened Pound Sterling.
Australian Dollar (AUD) Exchange Rate Forecast: Strong GDP Justifies RBA Interest Rate Stance
The Reserve Bank of Australia (RBA) decision to hold interest rates flat at 2.00% has been justified following a strong third-quarter performance from the Australian Economy, with GDP growing 0.9% Quarter-on-Quarter (QoQ) to 2.5% Year-on-Year (YoY). The RBA had previously said it wouldn’t be pressured into cutting rates, despite falling commodity prices causing problems for the Australian Mining sector.
The Australian Dollar is advancing against the majority of currencies, including 0.8% against the Euro (EUR) and 0.3% on Pound Sterling, the US Dollar (USD) and the Chinese Yuan Renminbi (CNY). A slight decline in the AiG Performance of Services Index to 48.2 and a much larger trade deficit than forecast have begun to weaken the ‘Aussie’ advance, however.
The AUD/GBP exchange rate is currently trending around 0.4900.
New Zealand Dollar (NZD) Bullish Gains Begin to Erode as Fed Signals Rate Hike is Likely
The New Zealand Dollar had benefitted from a weak US Dollar and a rise in dairy prices (New Zealand’s biggest export) to make significant gains on safe-haven assets. The GlobalDairyTrade price index rose 3.6% at the December 1st auction after three successive drops. The Average Winning Price rose from US$2345 to $2419 per metric ton.
The ‘Kiwi’ (NZD) has been bullish against Pound Sterling all week, however its gains are starting to slow as Fed Chair Janet Yellen has signalled that she is ready to raise interest rates at the Fed meeting in two weeks’ time. According to Yellen, the US economy is growing at a sufficient pace to increase employment and drive inflation closer towards the Fed’s target rate of 2%. The news has seen traders turn their attention back to the US Dollar and the resulting strength has slowed New Zealand Dollar progress.
The NZD/GBP exchange rate is currently trading around 0.4450.
Current GBP, AUD, NZD Exchange Rates
The GBP/AUD exchange rate is currently trading around 2.0387, while the GBP/NZD 2.2450.
The AUD/NZD exchange rate is currently trending around 1.1011 and NZD/AUD exchange rate is currently around 0.9078.
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