GBP Edged Higher To Regain Early Loss
After softening against the majority of its rivals yesterday following the Bank of England’s decision to leave policy unchanged, the Pound clawed back losses this morning. Sterling edged higher against the Euro and US Dollar ahead of the release of reports which are expected to show that UK industrial output increased in December.
Another batch of mixed US data inspired ‘Greenback’ movement yesterday. Separate reports showed the level of jobless claims fell by more-than-forecast while the nation’s trade deficit widened unexpectedly. Overnight the US Dollar recovered ground against the Yen as investors looked forward to an upbeat US non-farm payrolls figure.
In the immediate aftermath of the European Central Bank rate decision the Euro broadly strengthened, buoyed against its rivals by the news that the institution would refrain from introducing additional stimulus until at least March. The common currency fluctuated modestly as European trading began and Germany’s trade surplus was shown to have dipped in December, but movement was limited ahead of German industrial production figures.
Australia’s recent run of positive data came to an end last night as the nation’s AiG performance of construction index slipped from 50.8 to 48.2 in January, pushing back below the 50 mark separating growth from contraction. The ‘Aussie’ trimmed gains after the report was published and weakened further after the pace of expansion in China’s services industry slowed. However, Australian Dollar losses were limited by the news that the RBA raised its 2014 growth forecast.
New Zealand Dollar
Before the RBA delivered its quarterly policy statement the ‘Kiwi’ was approaching a one week-high against the US Dollar. The commodity-driven currency was little-changed against its major rivals as Australasian trading progressed and looks set to post a five-day decline of 0.4 per cent against its Australian counterpart.
Disappointing Canadian trade balance figures saw the ‘Loonie’ give up some of its recent strength during the North American session. With influential Canadian employment figures due out later today CAD volatility can be expected.
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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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