Despite the positive UK construction, manufacturing and services PMI data published last week, the Pound softened against the majority of its most traded peers following an unexpectedly dovish statement from the Bank of England. The British currency was little changed against rivals including the US Dollar and Euro prior to the release of industrial production data for the UK. Economists are forecasting that the report, which is out tomorrow, will show that industrial production grew for a fourth consecutive month.
With Federal Reserve Chairman Ben Bernanke due to speak this week – and perhaps add some clarity to the speculation surrounding the tapering of quantitative easing – the US Dollar remained bullish over the weekend. The ‘Greenback’ was boosted at the close of last week by a positive US non-farm payrolls report and brushed a five-week high against the Yen. Consumer credit data is the most influential piece of US news due out today.
The Euro lost ground against a broadly stronger US Dollar during the Asian session but was little changed against the Pound. Data already released this morning has shown that German exports fell in May while imports climbed, leaving the Eurozone’s largest economy with a smaller-than-expected trade surplus. Although the common currency is currently trading against the US Dollar in the region of 1.2829 and achieving above 86 pence per Euro, today’s Eurozone investor confidence figure and German industrial report are likely to inspire fluctuations.
During the local session the ‘Aussie’ retained recent losses against the US Dollar, trading close to a three-year low against its American counterpart. While US developments have been a big driver of Australian Dollar movement, expectations that this week’s Australian employment report will show stagnation are also wearing on the currency.
New Zealand Dollar
A report showing that house prices in New Zealand climbed in June modestly boosted the ‘Kiwi’ during local trade. A business opinion survey and retail card spending report for the South Pacific nation could inspire additional movement, but several influential data releases from China will also be of interest.
While last week’s Canadian employment figures were slightly better-than-forecast, ongoing concerns regarding the rate of Canada’s economic recovery saw the Loonie drop against several of its most traded currency rivals at the close of last week. Domestic business outlook future sales data could be responsible for Canadian Dollar fluctuations today.