Daily Currency update
The Pound fell against all of its peers yesterday and remains under pressure this morning after the currency was weighed down by lackluster service-sector and housing data. The soft data sparked a round of profit-taking, as investors took the view that the Pound is due for a breather, especially after hitting nine-month highs against the US Dollar in recent sessions.
The ‘Greenback’ is on course to make a third-weekly loss against the Japanese Yen and remains weaker against the majority of its peers as the US government shutdown delays the release of a key jobs report. The closure of the Federal government means that the nation’s Labour department is unable to publish the jobs figures which are key to the Federal Reserve’s ability to gauge the health of the economy. The lack of data increases uncertainty over when the Fed will choose to taper its monetary easing programme.
The Euro is holding steady at an eight-month high against the US Dollar and is trading slightly higher against the Pound. The single currency found support following yesterday’s better-than-expected retail sales and services PMI data.
The ‘Aussie’ managed to climb to its strongest level in two weeks as investors increased their bets that the Australian Reserve Bank will not cut borrowing rates this year. The currency also received support from strong Chinese data.
New Zealand Dollar
The ‘Kiwi’ is little changed as investors remain muted until the impasse over the US budget talks is resolved. No resolution appears to be imminent to the deadlock, which has raised concerns about a looming October 17th deadline for the government to reach an agreement on lifting the country's debt ceiling or risk defaulting on loans.
The Canadian Dollar is little moved against its US relation and traded within its narrowest range for since April as concerns grow that the US government shutdown will impact growth in Canada’s biggest trading partner.
South African Rand
The Rand managed to edge higher against the Pound after the UK currency was weakened by a broad sell-off and as economic data came in weaker-than forecast. Against the US Dollar the Rand firmed as concerns grow that the Federal Reserve is likely to delay any cuts to its monetary easing programme, a move that would benefit emerging market currencies such as the Rand.