Pound Holding the Highs and Looking Strong
The Pound is holding steady against the Euro and US Dollar as economists await the publication of a report which showed that the UK economy expanded in the fourth quarter of last year. GDP is forecast to have risen by 0.7%, slightly lower than the previous quarter’s figure of 0.8%. The currency is expected to make gains if the data comes in better-than-expected.
The US Dollar was little changed against its peers after it recovered from yesterday’s decline as demand for safe haven currencies increased. Concerns over the outlook for the Chinese economy continues to spook the markets and a recent run of disappointing US data has raised concerns that the USA’s economic recovery is slowing.
The Euro found some support early in the session after a report showed that consumer confidence in Germany increased more than economists expected. The currency was under pressure however from speculation that Russia will not grant Ukraine the remainder of a $15 billion bailout package, raising concerns that the EU may have to pick up the bill.
The ‘Aussie’ softened against its peers following the release of weaker-than-expected construction data. Official data earlier showed that construction work done in Australia fell 1% in the fourth quarter, compared to expectations for a 0.7% rise.
New Zealand Dollar
The New Zealand Dollar is little moved against its peers as investors await the release of balance of trade data. Economists are forecasting that the report will show that the nation’s balance of trade improved last month.
The Canadian Dollar remained under pressure against its peers after an economist famous for being bearish called for the Bank of Canada to weaken the currency further in order to support the Canadian economy. Nouriel Roubini said at a meeting of the Economic Club of Canada in Toronto earlier in the week that he believes that the ‘Loonie’ should be 10% lower than current levels.
South African Rand
The Rand is trading near to a six-week high against the US Dollar after it was bolstered by stronger-than-expected growth data and speculation that today’s budget report will be positive. Economists are expecting a budget deficit of 4.2% of GDP for the 2014/15 financial year, slightly wider than the 4.1% target outlined in October. Any unexpected changes to these projections could affect the Rand.
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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