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GBP Rate Holds Its Ground Against Euro and Dollar
The Pound firmed against the Euro and US Dollar as both currencies weakened on tumbling oil prices and increased demand for safe-haven assets. Sterling gains were restrained after data released by Rightmove showed that house prices fell by-3.3% on a month on month basis in December. On an annual basis, prices fell from 8.5% to 7.0%. The currency could experience further movement if the latest CBI Industrial Trends Orders data comes in positively.
US Dollar
The US Dollar softened against the Japanese Yen and other major peers as steep declines in Japanese equities markets and tumbling oil prices increased demand for safe-haven assets. Also weighing on the currency was increased risk aversion caused by the week’s upcoming Federal Reserve policy meeting.
The Euro
The Euro was weaker against the Pound and US Dollar amid concerns that the Eurozone is sliding closer into deflation territory and that the European Central Bank is edging towards introducing more monetary easing measures in order to stimulate economic growth in the region.
Australian Dollar
The ‘Aussie’ fell to a fresh four-year low against the US Dollar before firming slightly. The ‘Aussie’ declined after the government forecast a wider budget gap and that unemployment will rise in 2015. The nation’s underlying cash deficit will deteriorate to A$40.4 billion in the fiscal year ending June 30, 2015, compared to May’s estimate of A$29.8 billion. The government also forecast an unemployment rate of 6.5% by mid 2015, up from the May projection of 6.25%. Separately, data showed that Australia’s new motor vehicle sales fell 0.6% last month after a 1.6% decline in October. Economists are also keeping a close eye on the ongoing hostage situation-taking place in Sydney.
New Zealand Dollar
The New Zealand Dollar weakened against the ‘Greenback’ and other counterparts as risk sentiment wilts in response to dropping oil prices and mounting concerns over the strength of the Chinese economy.
Canadian Dollar
The ‘Loonie’ tumbled to its lowest level in 54 months against the US Dollar and remains at multi-year lows against a number of other major peers. Falling oil prices and the United Arab Emirates (UAE) announcement that OPEC will likely refrain from cutting oil production even if prices fall to $40 a barrel kept the Canadian Dollar under pressure.
South African Rand
The Rand firmed against the Pound after a report showed that South African retail sales increased to a nine-month high in October. Retail trade sales rose 3.4% in October compared to a year ago from 2.3% in September, above the market expectation of 2%
