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The Pound is little changed against the Euro and US Dollar as economists await the release of data which is expected to show that UK house prices fell in August. Sterling is trading just off from a two-month high against the Dollar but is likely to retreat slightly if prices have fallen. According to the Confederation of British Industry, home values are expected to have fallen by 1.8%, the first monthly decline recorded this year.
The ‘Greenback’ is set to make gains later in the session after data is expected to show that home sales in the USA jumped to their highest-level in more-than-three years in July. The data is likely to increase speculation that the Federal Reserve will begin to taper its monetary easing policy in September which will support the Dollar.
The Euro is trading close to a one-week high against the US Dollar as economists await the release of data that is expected to show that Germany, the Eurozone’s largest economy is gaining momentum. Investors are expecting to see an increase in German producer prices and the Purchasing Manager’s Indexes for services and manufacturing. The data is released on Friday following a quiet week for data releases.
The ‘Aussie’ rose to a three-week high on speculation that tomorrow’s Reserve Bank of Australia policy meeting minutes for August will signal that the Central Bank is in no hurry to cut interest rates. The currency also found support from a rise in the value of its biggest export, iron ore. The commodity climbed to its highest-level in five months.
New Zealand Dollar
The ‘Kiwi’ strengthened in local trading despite the country’s dairy sector being hit by another food scare. New Zealand's Ministry for Primary Industries revoked the export certificates on four consignments of lactoferrin made by Westland Milk today after they were found to contain unacceptable levels of nitrates. Despite that issue the currency rose as economists speculate that Reserve Bank of New Zealand governor Mark Wheeler will announce plans to impose restrictions on the country’s overheating housing market.
The ‘Loonie’ is little moved due to a lack of any major economic data releases. The next major data release for the North American country is due on Thursday when the latest retail sales data is released.
South African Rand
The Rand has tumbled to its lowest level in more than five weeks after being it was weighed down by renewed fears that labour strife in the crucial mining and automobile sectors could return. Strikes at a Toyota factory and escalating tensions over pay negotiations have spooked the markets.