Tedious: The Pound Won’t Go Higher
The Pound is little moved against the Euro and US Dollar as investors await the release of a report which economists expect will show that UK house prices will rise at a slower pace in December. Prices are forecast to have risen by 0.9% in December, down from the 1.1% rise seen in November. The currency is likely to see volatility later in the session due to the release of important data releases from the USA and Eurozone.
The US Dollar is heading for a five-year high against the Japanese Yen, but is little moved against the rest of its major peers as the market awaits the release of the minutes for the Federal Reserve’s December policy meeting. Economists will be looking for signs as to when a tapering to the Central Bank’s monetary easing programme will begin.
The Euro is softer against a number of peers as the market awaits the release of Eurozone unemployment and retail sales data. The number of Europeans out of work in the single currency bloc is expected to remain at 12.1% whilst sales are expected to show some improvement. If either report comes in below forecast we can expect the single currency to weaken against its peers.
The ‘Aussie’ has fallen against the majority of its most traded peers due to high speculation that the US Federal Reserve will continue to cut its stimulus programme which has bolstered commodity and emerging market currencies. The currency was also weakened by data which showed that construction activity in Australia declined in December.
New Zealand Dollar
The New Zealand Dollar pushed higher to come close to a five-year high against its Australian relation but softened against other peers as the market focuses on the Federal Reserve minutes which are due for release this afternoon.
The Canadian Dollar tumbled against the Pound and hit a three-year low against its US relation after data released yesterday showed that Canada’s trade deficit widened by nine times the figure forecast by economists. The data has increased speculation that Canadian Central Bank will cut interest rates in an effort to support the economy.
South African Rand
The South African Rand was slightly firmer against the Dollar on Wednesday after better than expected foreign exchange reserves data. The Rand is likely to fall in the afternoon however following the release of the Federal Reserve minutes. Any suggestion that the Fed will expand on tapering its easing programme will weaken the emerging market currency.
Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.
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