USD Weakens Further Against The Pound
The Pound softened against a number of peers yesterday after data showed that mortgage approvals in the UK fell to an 11-month low. Losses were restrained however as the currency continues to be supported by expectations that the Bank of England will be the first major central bank to raise interest rates. Sterling could find support in today’s session if the latest Markit Manufacturing PMI report comes in strongly.
The US Dollar edged away from recent lows against the Euro and Japanese Yen but remains close to a six-year low against the Pound. Further gains for the ‘Greenback’ are expected to be restrained due to persistent concerns over the outlook for the US economic recovery. Comments made by a Federal Reserve Policy maker also weighed as they underlined the central bank’s view that interest rates will remain close to zero for at least another year.
The Euro remained supported as data released yesterday showed that the Eurozone’s annual rate of inflation held steady at 0.5% in June, easing some of the pressure on the European Central Bank to announce fresh monetary easing measures at this week’s policy meeting. Today sees the release of the latest unemployment and manufacturing PMI data for the region, positive figures will offer support to the currency.
The ‘Aussie’ advanced to its best level in seven months against the US Dollar after the Reserve Bank of Australia left interest rates unchanged. The currency received additional support from an upbeat Chinese manufacturing report. The RBA left its benchmark interest rate unchanged at a record low 2.5%.
New Zealand Dollar
The New Zealand Dollar edged higher against a number of major peers after data out China supported the currency. China’s final HSBC Purchasing Managers Index came in at 50.7, weaker than a preliminary reading of 50.8 but higher than May’s 49.4 figure.
The Canadian Dollar pushed higher against most of its major peers as it too found support from the positive data out of China. Further gains were restricted by yesterday’s weaker-than-expected GDP data which has dampened expectations that the Bank of Canada will raise interest rates anytime soon.
South African Rand
The Rand found some support from upbeat Chinese data but remains under pressure as investors brace themselves for a new round of worker unrest in the South African labour market. More than 220,000 members of the National Union of Metalworkers are due to start strike action today after last ditch wage negotiations failed.
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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