Money transfer comparison Currency update
The Pound is on track to make its second weekly advance against the US Dollar after investors increased their bets that the Bank of England may raise interest rates sooner than expected as the UK economy continues to strengthen. Comments made by BoE governor Mark Carney also boosted the currency after he said that the country is experiencing ‘one of the strongest recoveries in the advanced world’. Against the Japanese Yen, Sterling climbed to a four-year high as speculation rose that the UK economy will recover faster than Japan’s.
The US Dollar initially made gains against the Euro and Sterling after Federal Reserve Governor Nominee Janet Yellen told the US Congress that monetary stimulus will not continue ‘indefinitely’. The currency then softened as investors took a wait-and-see approach to this afternoon’s economic data releases which include Industrial and manufacturing production data. If both sets of data show improvement then the currency is likely to rise as the likelihood of earlier tapering to the Federal Reserve’s easing policy will increase.
The Euro is little moved against the US Dollar and Pound as the single currency remains under pressure after the ECB cut interest rates last week. Sentiment also took a knock after data released yesterday showed that the Eurozone economy expanded by just 0.1% in the third quarter. On a year-by-year basis the region’s economy contracted by 0.4% suggesting that the recovery has faltered.
The ‘Aussie’ made gains against the Pound and managed to make its first weekly gain against the Japanese Yen in four weeks. The currency rose as investors latched onto comments by Federal Reserve governor nominee Janet Yellen which raised the possibility of the Central Bank’s easing programme continuing for longer than expected.
New Zealand Dollar
The ‘Kiwi’ followed its ‘Aussie’ relation higher against its peers on the prospect that the Federal Reserve’s quantitative easing programme could be sustained if Janet Yellen takes the top job at the Fed.
The Canadian Dollar remains close to its weakest level in two-months against its US relation as economists took bets that the currency rallied too quickly following the pro-quantitative easing comments made by Janet Yellen. A fall in oil prices also weighed upon the currency.
South African Rand
The Rand made some gains against its peers after South Africa’s 2012 trade data received a significant revision. The South African Revenue Service cut the trade gap to R34.6 billion from the previous reading of R116.9 billion after it adjusted the data to include trade figures with Botswana, Namimibia, Swaziland and Lesotho. The news reduced some of the concerns over the weakness of the South African economy.