GBP – 7 Week High Against Euro
The Pound is trading at a seven-week high against the Euro as investors await the release of the minutes of the Bank of England’s March policy meeting. Speculation that policy makers are moving closer to raising interest rates lent support to the Pound. Against the US Dollar the currency is trading close to a four year high on expectations that the UK economy will expand at a faster pace than the Eurozone.
The US Dollar found support yesterday following the release of stronger-than-expected US housing data and a positive Fed Manufacturing Index. Against Sterling the ‘Greenback’ was trading at a four year low as economists expect the latest Bank of England minutes to show that interest rates in the UK could be hiked sooner than initially expected.
The Euro remains weaker against the Pound and US Dollar as sentiment for the single currency remains weaker after the European Central Bank suggested that a cut to its already record low interest rate could be an option. The currency was also softened after ECB Executive Board member Benoit Coeure said that the appreciation of the Euro since mid-2012 was the main cause for low inflation across the region.
The ‘Aussie’ tumbled against all of its major peers and slid to its lowest level in two-weeks against the US Dollar. The cause for the currency’s sharp decline was the release of a report out of China which showed that manufacturing contracted and a separate report which showed lower-than-expected inflation in Australia. The currency was also sharply lower against the Euro and Pound.
New Zealand Dollar
The New Zealand Dollar fell against several peers as the disappointing data out of China weighed and as investors turned their attention to the Reserve Bank of New Zealand’s interest rate decision which is due tonight.
The Canadian Dollar was softer against a number of peers after yesterday’s positive data out of the USA weighed upon the ‘Loonie’. The currency could regain some ground if this afternoon’s retail sales data comes in as strongly as expected.
South African Rand
The Rand tumbled against its major peers as concerns over Ukraine and disappointing data out of China weighed heavily upon emerging market currencies. The platinum miners’ strike which continues to drag on is also continuing to add pressure to the Rand.
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