As the European session opened the Pound was holding steady against the US Dollar and was little changed against the Euro. Economists have forecast that today’s UK industrial production report will show a gain in May, but a surprising result could trigger Sterling fluctuations.
With speculation surrounding Federal Reserve Chairman Ben Bernanke’s forthcoming announcement rising, the safe-haven US Dollar pared recent gains and slipped against its main rivals during the Asian session. Movement in the USD/GBP pairing is expected to occur following the publication of UK industrial production/GDP data.
With European Union Finance Ministers approving the next bailout payment for Greece the Euro strengthened against several of its most traded peers. The common currency posted a modest advance on the ‘Greenback’ and strengthened to 130.46 against the Yen. The publication of the International Monetary Fund’s global economic forecast is likely to inspire additional Euro movement in the hours ahead.
During the Australasian session the ‘Aussie’ lost ground against almost all of its currency counterparts. The South Pacific asset was adversely affected by a domestic report showing business conditions at their lowest level since 2009 and concerns regarding the effect faster inflation in China will have on Australian trade. The Australian Dollar was trading in the region of 91.25 US cents as local trade ended, having shed some of the previous day’s 0.7 per cent gain.
New Zealand Dollar
As New Zealand’s business opinion survey for the second quarter jumped to 32 from 23 (its highest level for nearly four years) the ‘Kiwi’ was bolstered. Although higher inflation in China could dampen New Zealand’s trade prospects ‘Kiwi’ declines were limited by the positive home-grown news and the currency was little changed against the US Dollar. A separate report showed that retail card spending in New Zealand gained by 1.1 per cent in June, better than the 0.6 per cent advance expected.
Data showing that business optimism in Canada is fading pushed the ‘Loonie’ to an almost two-year low against the US Dollar. However, the Canadian Dollar could recoup losses if today’s domestic housing starts data meets expectations for a 4.5 per cent rise in May.