Money transfer compared currency update
The Pound has softened for a third day against the Euro as investors take a wait and see approach to today’s Bank of England policy decision. Economists are expecting the Central Bank to keep interest rates at record lows and keep its bond buying target unchanged. The Autumn Statement due to be unveiled by Chancellor George Osborne is also likely to impact the currency by upgrading the governments expectations for economic growth.
The US Dollar is weaker against the Pound and Euro as investors await the release of GDP and jobless claims data. If both sets of data come in better than expected than the ‘Greenback’ will rise as bets will increase that the Federal Reserve will taper its monetary easing programme sooner rather than later.
The Euro is at a five-week high against the US Dollar and edged higher against Sterling as investors wait for the European Central Banks latest policy statement. The ECB is widely expected to refrain from making any new policy decisions but the post policy meeting speech by Bank President Mario Draghi will be closely watched for indications on the ECB's future policy moves.
The ‘Aussie’ is trading close to a three-month low against the US Dollar and slipped to a four-year low against the Pound after yesterday’s GDP data disappointed. Data released showed that the Australian trade deficit widened from A$284 million to A$529 million in October.
New Zealand Dollar
The ‘Kiwi’ is holding at a five-year high against its Australian counterpart but fell against the Euro and Pound. The currency is likely to weaken further later in the session if data out of the USA comes in above forecast. Investors will raise their bets that the Federal Reserve will taper its monetary easing programme as the US economy improves, a move that would be detrimental to the commodity based ‘Kiwi’.
The Canadian Dollar is at its lowest-level in three-years against its US relation and was at a four-year low against the Pound after Bank of Canada Governor Stephen Poloz warned over low inflation. His comments increased investor bets that the Central Bank will choose to maintain interest rates at their current level.
South African Rand
The Rand firmed against the US Dollar but is likely to soften later in the session due to the publication of important data out of the USA which is expected to be positive. The South African Chamber of Commerce and Industry will release its business confidence index for November later in the session.