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GBP Rate Weakens Further Against US Dollar
Last week the Pound rallied against the Euro amid expectations that the European Central Bank will roll out full scale quantitative easing measures early next year. However, the British currency fell against the US Dollar as the ‘Greenback’ was buoyed by an impressive US Non-Farm Payrolls print. With UK reports in short supply today, Pound movement will be dictated by global economic developments, the UK Lloyds Employment Confidence Index and speeches to be given by two Bank of England officials.
US Dollar
The US Dollar posted gains across the board on Friday as the US economy was shown to have added over 300,000 positions in November. The unexpectedly strong result increased the odds of the Federal Reserve raising interest rates in the first half of next year rather than the second and pushed the ‘Greenback’ higher. Modest US Dollar fluctuations could occur in the hours ahead as the US publishes its US Labour Market Conditions Change Index.
Euro
Although the common currency initially rallied in the aftermath of last Thursday’s European Central Bank policy meeting (as the institution refrained from rolling out additional stimulus) the Euro pared these gains before the weekend. On Monday Euro losses were recorded as German industrial production was shown to have increased by less-than-expected in October. Today’s Investor Confidence index for the Eurozone may inspire further movement.
Australian Dollar
The Australian Dollar began the week in a softer position against the majority of its currency counterparts as China published disappointing trade data. As China is Australia’s largest trading partner, the news that the level of imports in the Asian nation fell last month dragged the ‘Aussie’ lower.
New Zealand Dollar
Below-forecast Chinese trade figures saw the New Zealand Dollar fall by over 0.5% against the Australian Dollar, more than 0.8% against the Euro and around 0.9% against the Pound. New Zealand’s Manufacturing Activity gauge for the third quarter, while improving from -2.3% to -1.2%, lent the ‘Kiwi’ little support.
Canadian Dollar
On Friday the Canadian Dollar plummeted as Canada was shown to have lost positions in November. Economists had predicted that employment in the nation would stagnate, so the fact it fell by 10,700 from the previous month weighed heavily on the ‘Loonie’. Today’s Canadian Housing Starts report could help the Canadian Dollar recover losses if it shows the increase expected.
South African Rand
At the close of last week the South African Rand dropped to a 9-week low against the US Dollar as a result of the risk-off environment generated by Friday’s strong US employment gain. The issues with South Africa’s electricity supply also kept the Rand under pressure. Today’s domestic current account report could be the catalyst for additional Rand movement.
