British Pound Closes On Yearly High – Ready For Unemployment Data
The Pound is close to a one-year high against the Euro ahead of the release of data which is expected to show that UK unemployment fell closer to the Bank of England’s target of 7%. If the jobless rate does fall it will raise expectations for the Central Bank to raise interest rates sooner than expected.
The US Dollar moved higher against the Japanese Yen after the Bank of Japan announced that it will be keeping its monetary policy unchanged. Demand for the ‘Greenback’ continues to be supported by expectations that the Federal Reserve will reduce its quantitative easing programme at next week’s policy meeting.
The Euro softened yesterday after the latest ZEW report showed that economic sentiment in Germany came in below forecasts, suggesting that there could be some softness in the Eurozone’s largest economy. There’s not much in the way of domestic data today for the Euro so the currency will be at the mercy of key data releases from the UK and USA.
The ‘Aussie’ surged higher against the majority of its peers overnight after an inflation report dampened expectations for the Reserve Bank of Australia to make a cut to interest rates. Inflation in Australia rose o 2.7% in the fourth quarter of 2013, beating economist forecasts for a figure of 2.4%.
New Zealand Dollar
The New Zealand Dollar edged higher against its U.S. and Australian counterparts early in the morning but gains are expected to remain limited as expectations for the Federal Reserve to continue tapering its stimulus program supported the ‘Greenback’. The ‘Kiwi’ retreated from an 8-year high against its ‘Aussie’ relation following the release of better-than-expected inflation data out of the bigger Oceanic nation.
The Canadian Dollar firmed slightly against the Pound and other peers as investors take and see approach to Wednesday’s session. All eyes are on the Bank of Canada’s interest rate decision and press conference which are due in the afternoon.
South African Rand
The Rand firmed slightly against its peers after December’s inflation data came in softer than forecast. On a yearly basis however it beat expectations. The Rand remains under heavy pressure however from the threat of strike action at the nations gold and platinum mines. If any violence flares during the strikes then we can expect the Rand to tumble.
Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.
Pete Southern is an active trader, chartist and writer for market blogs. He is currently technical analysis contributor and admin at this here blog.
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