Currency update and latest news on the major currencies
The Canadian Dollar strengthened yesterday after it received support from a better-than-expected trade balance report. Canada posted its first trade surplus in five months. According to Statistics Canada, the trade surplus came in at C$290 million in February. In the first month of the year the nation posted a trade deficit of C$340 million. The surplus figure was better than the C$ 200 million economists had been expecting.
The Pound is weaker against the US Dollar and a number of major peers after it was weighed upon by yesterday’s weaker-than-expected service sector PMI report. Markit’s PMI fell to 57.6 in March, down from the 58.2 recorded in the previous month. The data disappointed economists who had been expecting a figure of 58.1. Against the Euro, Sterling breached the 1.21 level after the single currency was weakened by the outcome of the European Central Bank’s policy meeting.
The US Dollar made gains against most of its major peers as demand for the safe haven currency increased following the release of mixed economic data which suggested that the US economy will require less support from the Federal Reserve. The market’s attention will be focused on today’s eagerly anticipated non-farm payrolls data which is expected to give a clearer picture on how well the US economy is recovering.
The Euro fell to its lowest level in over a month against the US Dollar and fell against the Pound as comments made by ECB President Mario Draghi weighed on sentiment. Draghi talked down the risks from deflation in the Eurozone, but added that the Bank has not ruled out the use of further policy action such as quantitative easing.
The ‘Aussie’ is on course to end the week lower against the US Dollar as investors await the release of the US nonfarm payrolls data. Ahead of the data the ‘Aussie’ is little changed as traders wait. If the US employment data is strong and paves the way forward for the US Federal Reserve to continue reining in its monthly bond buying program, the US Dollar is likely to rise and will take some of the steam out of the ‘Aussie’s’ latest gains.
New Zealand Dollar
The New Zealand Dollar fell against its peers after international dairy prices tumbled to their lowest level in over a year as excess supply from New Zealand dragged down prices. As a result of the decline the ‘Kiwi’ finally retreated from its stubbornly high levels.
South African Rand
The Rand remained under pressure against its rivals as investors await the release of the US jobs data. A strong report will send the Rand down against the ‘Greenback’ and with pressure remaining high from the 10-week long strike in the platinum mining sector.