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    Thread: Major currencies – key points this week


    1. #1

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      Major currencies – key points this week

      Hi everyone, please see the latest currency updates below – thanks.

      AUD: Nervousness about global growth hurt all three of the commodity-oriented dollars and the Aussie was fortunate to take the least damaging blows. It even managed to outperform the benighted euro, though not through any intrinsic economic qualities. A 1.1% monthly increase for new home sales did little to offset the -16.2% fall in the preceding three months. More worrying was a further decline in the AiG manufacturing index, which showed a worsening slowdown in activity.

      USD: The US dollar missed out on another win-win week but it, alongside the Swiss franc, was not far behind sterling. The main handicap for the dollar was the expectation of a positive outcome when the German parliament voted on the country's support for the second bailout of Greece. After that vote went through as expected investors were left with nothing to look forward to and they drifted back towards the US currency.

      NZD: As well as the negative sentiment surrounding the world economy, New Zealand also had to cope with a downgrade of its credit rating from AA+ to AA by two of the big three agencies. The unwelcome news added to the downward pressure on the Kiwi. It is now more than -8% of its early-August high against sterling and a further retreat is easy enough to imagine if current technical obstacles can be overcome.

      CAD: Among the trio of "commodity" dollars it was the Loonie that fared least well, although it was not far behind the NZ dollar and the Japanese yen. There was no compelling reason for its underperformance other than a vague sense that the Bank of Canada might be inclined to lower its benchmark interest rate when the policy committee meets in three weeks' time. Nevertheless, it lost -1.7% to the pound and a significant -5.1% to the US dollar.

      EUR: The good news for the euro was the German Bundestag's vote to support the second Greek bailout. The bad news came two days later with an announcement that Greece would miss its target of reducing its budget deficit to 6.5% of GDP next year. In theory that means Greece will not be allowed to receive any more bailout money. In practise it just means that EU leaders will have to come up with a plausible reason why that will not happen. Either way, it is not a positive development for the euro.

      GBP: Sterling had a good week. Mixed news on UK house prices was offset by the highest monthly number of mortgage approvals since January last year. Gfk's index of consumer confidence showed a small but welcome and unexpected improvement to a still-negative -30 in September. Despite the media clamour, analysts do not expect the Bank of England to reactivate its asset purchase "money printing" at this week's policy meeting.
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    2. Moneycorp - Commercial foreign exchange since 1979
    3. #2

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      Hi all - the latest currency update is below - thanks.

      AUD: The commodity- and energy-related currencies were at the upper end of the scale for the same reason the US dollar was close to the bottom. The prospect of a resolution to the European debt crisis created a more upbeat market view, dispelling - at least for the moment - the prospect of a Euroland blow-up and a global recession. If recovery looks more assured, China will want more of Australia's ore and coal exports.

      GBP: The pound kept company with the safe-haven dollar, yen and franc not because of its AAA credit rating but because investors suspected the Bank of England might embark on another round of quantitative easing. Sure enough, on Thursday the Bank did exactly that, announcing another £75bn of asset sales. The news was temporarily bad for the pound but seemed to have done no long-lasting damage.

      NZD: Rugby-related beer sales are contributing to the NZ economy but the world cup has also displaced some of the usual economic activity. The effect of the Canterbury earthquake has at last become positive though. The rebuilding effort has driven business optimism in the area to the highest level in the whole country. On a broader front, business sentiment was muted in the three months to September although firms seemed to be more worried about the general outlook than they were about their own particular business.

      USD: Upbeat sentiment among investors carried through the weekend, spoiling their appetite for the safe-haven US dollar and Japanese yen, which were the week's worst performers. A stronger than expected US employment report was also, perversely, negative for the Greenback. The argument there was that a stronger US economy points to a stronger world economy. That meant less reason to stock up with low-risk assets such as the dollar.

      EUR: It was an above-average week for agreements to solve the southern European debt crisis. Two of them emerged; one between EU finance ministers to continue lending money to Greece and one between President Sarkozy and Chancellor Merkel to recapitalise European banks. No details were revealed, of course, but this time investors think they might really be serious about solving the problem. The European Central Bank helped things along with a promise to lend unlimited amounts of money to Euroland commercial banks.

      CAD: Improved investor optimism was as helpful to the Loonie as it was to the antipodean dollars. A steep -10.4% monthly fall in Canadian building permits was only a temporary hindrance. Otherwise the economic data were robust. The Ivey purchasing managers' index bucked the global downward trend with a six-point improvement to 63.4 in September. There was good news on the employment front too. A net 60.9k jobs were created in September, three time as many as expected.
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      Hi everyone – please find the latest currency updates below – thanks.

      AUD: There was a similar feeling of déjà-vu among the "commodity" dollars. Fewer worries meant a greater appetite for the currencies of commodity exporters, especially for those offering an above-average rate of interest. Australia further improved the AUD's position with stronger than expected employment data, including a fall in the rate of unemployment to 5.2%. The overall effect put the Aussie in top place for the week.

      GBP: Sterling spent another week in the company of those more famously safe-haven currencies, the US dollar and the yen. The pound dodged the potentially damaging effects of a 15-year high for unemployment but remained in the shadow of the euro. Although grouped at the bottom of the league with the USD and JPY, sterling outperformed both, pulled ahead in the euro's slipstream.

      EUR: Europhoria supported the currency for another week. Investors' optimism paid off when it was confirmed that EU leaders will announce a full and final solution to the Euroland debt problem this coming weekend. Although only a broad-brush plan is expected, investors are confident that it will lead to concrete results. As long as that confidence survives the euro will remain buoyant.

      USD: It was exactly the same story last week as it had been during the previous seven days. The European Union was preparing a real, concrete, workable plan to sort out its debt crisis, removing a major cause of concern for the global economy. That worry having been removed, investors did not feel the need for safety offered by the US dollar and the yen. For a second week the two safe-haven currencies wore the worst performers

      NZD: The Kiwi was close to the top of the table, also driven mainly by renewed optimism about Euroland, but could not keep pace with the Aussie. Not only were there no convenient and helpfully strong statistics from the New Zealand economy, New Zealand's 2.5% benchmark interest rate looks anaemic alongside Australia's 4.75% equivalent. The NZ dollar did not do badly; it just fared less well.

      CAD: Of the Commonwealth trio the Loonie came third. Perhaps it was held back by its 1% benchmark interest rate - the lowest of the bunch. Maybe it was the shortage of positive economic data. Either way, the Canadian dollar could not attract as much support as its South Pacific cousins. Canadian economic data were decent enough but not sufficiently so to generate upward traction.
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      The Australian dollar has strengthened after it was reported that France and Germany were ready to boost the eurozone's rescue fund in a bid to address the public debt crisis.

      The markets are very fragile currently, therefore any news is having an impact on currencies – in this case, the suggestion of a solution to the debt crisis sparked interest in the Australian dollar (making it strengthen).
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      Hi all - latest information on currencies is below, thanks.

      EUR: Another good week for the euro saw it adding two cents against the pound. Again it was sentiment that took it higher. The logic for last week's rally was that some euro area banks were repaying their emergency loans from the European Central Bank. It wasn't a brilliant reason to buy the euro but any excuse was enough.

      USD:
      Sterling covered a range of nearly two cents, rising during the first four days of the week and falling all the way back on Friday for a net result of zero change. The dollar's big break came with Friday's stronger-than-expected payrolls number. As well as helping the Greenback the data also sent the Canadian, Australian and New Zealand dollars higher.

      CAD: The pound was steady within a one-cent range until Friday afternoon, when it lurched lower. It suffered a net loss of two cents on the week. The Loonie's big break came with a stronger-than-expected US employment report. As well as helping the Greenback, the data also sent the Canadian, Australian and New Zealand dollars higher.

      AUD: The Australian dollar did slightly better than the pound, strengthening by a third of a cent in a week shortened by Monday's Australia Day holiday. The Aussie's big break came with Friday's stronger-than-expected US employment report. As well as helping the Greenback, the data also sent the Canadian, Australian and New Zealand dollars higher.

      NZD: The NZ dollar strengthened by two and a half cents against the pound. Having gone nowhere during the first four days of the week the gain came entirely on Friday. The Kiwi's big break was a stronger-than-expected US employment report. As well as helping the Greenback, the data also sent the Canadian, Australian and New Zealand dollars higher.
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    7. #6

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      Latest review of currencies is below, thanks.

      EUR
      The euro and the pound fought themselves to a standstill, sterling hovering between €1.17 and €1.18 and ultimately going nowhere. An odd-lot of Euroland economic statistics brought something for everyone but nothing of any great importance. Lurking in the background, the German constitutional court is considering the legitimacy of the European Central Bank's plan to support Euroland government bonds. A decision against the plan would hurt the euro.

      USD
      The dollar was the worst performer among major currencies, losing a cent and three quarters to the pound. After initial enthusiasm that the Federal Reserve would soon begin to wind down its money-printing programme, reality has set in. There will be no sudden switching off of the money tap. Whilst that updated assessment has not done much to help the commodity and emerging market currencies, neither has it improved investors' view of the dollar.

      CAD
      The Canadian dollar slid lower losing a cent to the pound. It is caught between the rock of association with the Greenback and the hard place of its status as a commodity and energy exporter. Last week it was the Loonie's link to the US dollar that held it back, as investors began to realise that the Federal Reserve was not suddenly about to turn off the printing presses which continue to churn out $85bn a month.

      AUD
      After three weeks of losses the Aussie rebounded, rising a cent and a half against sterling. Down by 14% at the beginning of the week from its March highs, investors were running out of reasons to sell the Australian dollar. They came to the conclusion that the downward move had been over-extended and looked to take profits on speculative short positions. Investors took a similar view with the New Zealand dollar and the South African rand.

      NZD
      The NZ dollar was the second-best-performing major currency, strengthening by three and three quarter cents against the pound. Down by 12% at the beginning of the week from its March highs, investors were running out of reasons to sell the New Zealand dollar. They came to the conclusion that the downward move had been over-extended and looked to take profits on speculative short positions. Investors took a similar view with the Australian dollar and the South African rand.
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      Please see the latest currency updates below, thanks

      Euro
      Having stalled the previous week the euro went into reverse. It was the worst-performing major currency, losing half a US cent and one cent to sterling. The change of heart follows comments from Euroland central bankers which suggest they want a weaker currency. The possibility of a decision by the European Central Bank in the coming week to relax monetary policy further, perhaps with negative interest rates, is weighing on the euro.


      US dollar
      After a respectable performance the previous week, when the Federal Reserve chief set out the timetable for higher US interest rates, the dollar enjoyed less success over the last seven days. Its problems stemmed from remarks by a Fed district governor. He suggested that when the Fed chairperson said rates would head higher "around" six months after the bond purchase programme ended, what she really meant was "at least" six months. Less urgency for higher rates meant less appetite for the dollar.


      Canadian dollar
      It wasn't the weakest performer but the Canadian dollar had another joyless week, falling by two US cents and by two and a half cents against sterling. It was almost a one-way street down for the Loonie despite a perfectly serviceable - if short - set of Canadian economic data. Inflation was a touch higher than expected in February and January's retail sales were well over forecast. Yet investors are still uneasy about the Canadian dollar.


      Australian dollar
      The Australian dollar is on a roll. For a second successive week it was the top performer, strengthening by three and a half euro cents, two US cents and by two and a half cents against sterling. Unusually, the Reserve Bank of Australia governor helped it on its way with a speech that emphasised a prospective housing boom and a shift in economic emphasis away from mining and towards other industries.


      New Zealand dollar
      For a second week the Kiwi played second fiddle to the Australian dollar. It still did well though, strengthening by one and a half US cents and by nearly two cents against sterling. Sentiment, rather than hard economic data, was the main reason for the NZ dollar's success but the ecostats did help too: New Zealand's trade surplus widened in February with exports increasing by more than expected and imports by less.
      John from Moneycorp: helping you get the best exchange rate