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What Next For The British Pound?
Slightly disappointing UK trade data saw the Pound falter modestly on Friday. The British asset also slipped against the Euro as the common currency rebounded following the European Central Bank’s rate decision. Today’s UK Lloyds employment confidence index could have some impact on the Pound, but movement in the British asset is likely to be limited ahead of this week’s domestic employment data.
US Dollar
At the close of last week the US Dollar was supported by a surprisingly strong US non-farm payrolls report. The US economy was shown to have added more positions than forecast in May, allowing the unemployment rate to hold at 6.3 per cent rather than rising to 6.4 per cent as expected. A lack of significant US economic reports could restrain ‘Greenback’ movement over the hours ahead.
Euro
On Thursday the European Central Bank’s rate decision saw the Euro plummet against its rivals. However, even though the ECB deployed a range of policy measures (including an unprecedented negative deposit rate) the Euro bounced back before the end of the week and gained by the most against the US Dollar for three months. Later today the Sentix investor confidence report for the Eurozone may inspire market movement.
Australian Dollar
As investors turned to higher-risk assets in the wake of the ECB’s rate decision, the ‘Aussie’ advanced on its most traded currency counterparts. The Australian Dollar held these gains into the weekend but fluctuated modestly as mixed Chinese trade figures were published. While Chinese exports increased by more-than-anticipated, the nation’s imports unexpectedly dropped by 1.6 per cent rather than increasing the 6.0 per cent forecast.
New Zealand Dollar
Like the Australian Dollar, the ‘Kiwi’ broadly strengthened in the aftermath of the ECB rate announcement. The commodity-driven currency has been feeling the pressure as a result of declining dairy prices but could recover losses ahead of the Reserve Bank of New Zealand’s rate decision.
Canadian Dollar
A less-than-impressive Canadian employment report saw the ‘Loonie’ post widespread declines before the weekend. The Canadian Dollar is still trending lower and may hold Friday’s declines in the days ahead.
South African Rand
As emerging market assets rallied in response to the ECB’s policy decision, the Rand advanced to a one-week high against the US Dollar. Tuesday’s South African manufacturing production and business confidence data could be the catalyst for further Rand movement.
Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.
