All Eyes On Bank Of England
The Pound climbed to a one-week high against the US Dollar after data released early in Tuesday’s session showed that UK retail sales growth picked up speed in January, increasing optimism that the UK economic recovery is continuing to pick up speed. With hardly any major data releases due for the rest of the day trade is likely to be muted. Sterling is likely to experience volatility on Wednesday as the Bank of England is due to release its new economic forecasts and consumer price information at tomorrow’s quarterly inflation report.
The US Dollar weakened against the majority of its major peers overnight as last week’s disappointing jobs data continues to weigh. The market is uneasy ahead of new Federal Reserve Chairman Janet Yellen’s first testimonial to Congress. She is expected to reiterate that the bank will continue to unwind its stimulus program as long as the economic recovery continues as expected, and to repeat that the bank will keep interest rates at current record lows for some time to come. The testimony comes amidst concerns that the US economy could be slowing down.
The Euro is trading slightly higher against the Pound and US Dollar following the release of a report which showed that investor confidence in the Eurozone climbed to a 34-month high. With no data releases due for the single currency today trade is expected to be muted and the currency will be at the mercy of international factors.
The ‘Aussie’ rose to a four-week high against the US Dollar following the release of positive economic data releases. Business confidence and house price inflation data both came in above expectations.
New Zealand Dollar
The New Zealand Dollar climbed to its highest level in more than two weeks against the US Dollar and pushed higher against the Pound as demand for the US currency was weighed upon ahead of Federal Reserve Chairman Janet Yellen’s first testimonial to Congress. The ‘Kiwi’ fell against the ‘Aussie’ following the release of positive data in the bigger South Pacific nation.
The Canadian Dollar weakened against most of its major peers on Monday after data showed that the pace of Canadian housing starts slowed last month. The decline was double the rate expected by economists. The currency was also weighed upon by a fall in the price of Crude Oil, Canada’s biggest export.
South African Rand
The Rand edged higher against the US Dollar as the markets await Janet Yellen’s speech to the US Congress. The currency remains under pressure however from ongoing strikes in the platinum mining sector.
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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