Under Pressure: The Dollar Hopes For Retail Sales Boost
The Pound fell against all of its peers yesterday after an index showed that recent UK economic data releases are falling short of economist expectations. The report weakened demand for the currency. Today, Sterling managed to recover some lost ground against the Euro on expectations that inflation data will come in better-than-expected.
The US Dollar remains under pressure from last week’s disappointing jobs data. The U.S. economy added far fewer jobs than expected in December cast doubts over the strength of the recovery in the labour market, and fuelled expectations that the Federal Reserve will maintain loose monetary policy for longer. The currency could regain some ground if today’s retail sales data comes in positively.
The Euro strengthened against the US Dollar and Pound yesterday. The single currency found support on a quiet news day from positive data out of Italy which showed that the regions third largest economy in the Eurozone saw its industrial production increase more than expected. Portugal and Greece both published better-than-forecast inflation data. Today the Euro has softened slightly ahead of the release of Eurozone industrial production data which is expected to show a rise in November.
The ‘Aussie’ retreated from yesterday’s one-month high as investors look ahead to tomorrow’s Chinese data and as expectations remain high that the US Federal Reserve will continue to taper its monetary easing programme.
New Zealand Dollar
The New Zealand Dollar rose to fresh two-month highs against its U.S. counterpart on Tuesday, after strong business confidence data from New Zealand, while Friday’s downbeat U.S. employment data continued to weigh on the greenback. The currency also rose against the Euro as strong business confidence, increased consumer spending and rising property values fuel expectations the Reserve Bank will hike interest rates.
The Canadian Dollar is trading close to its lowest level since October 2009 against its US counterpart and remains at multi-year lows against the Pound and Euro as the currency remains under pressure following last week’s poor jobs report.
South African Rand
The South African Rand tumbled to a five-year low against a number of peers as concerns rise that mining output will be affected by labour disputes. As well as worries over labour unrest investors are increasingly being put off of the Rand by a weak economic outlook for the South African economy.
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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