Daily currency update
The US Dollar pushed towards a two-week high against a number of peers after data showed that the number of new homes bought last month soared by 9.6%, exceeding economist expectations and easing concerns that the US economy is slowing. Today sees Federal Reserve Chairman Janet Yellen address the US senate. Economists are expecting her to reaffirm that the Central Bank will continue to press on with tapering its bond buying programme.
The Pound advanced yesterday after GDP data matched economist expectations. The UK economy advanced by 0.7% and business investment soared in the fourth quarter. Today the currency is little moved as investors await a speech by Bank of England policy maker David Miles. Yesterday Miles hinted that the Central Bank could raise interest rates next year so investors will be watching today’s speech closely to see whether the Bank as a whole is considering such a move.
The Euro softened against the Pound and US Dollar after data released early in today’s session showed that consumer confidence fell in France and GDP growth missed its expected level in Spain. Germany once again posted positive unemployment data. The overall jobless rate fell to 5%, suggesting that the region’s biggest economy is leading the economic recovery. The single currency could make gains this afternoon if Eurozone data and German inflation data comes in positively.
The ‘Aussie’ fell below a two-week low against the US Dollar and softened against the Pound after it was weighed upon by data which showed that private capital expenditure in Australia fell more-than-expected in the last quarter.
New Zealand Dollar
The New Zealand Dollar strengthened against several major peers due to the release of positive trade balance data. The report showed that New Zealand’s trade surplus narrowed less-than-expected last month.
The Canadian Dollar weakened against its peers due to the strengthening of its US relation. The lack of any economic data and other major market drivers left the currency vulnerable to events elsewhere. Today sees the release of current account data for Canada which could cause some volatility.
South African Rand
The Rand weakened against the US Dollar and other peers as emerging markets came under pressure once more from concerns over the political situation in Turkey and as Russia put its troops on combat readiness, a move which raised tensions over the Ukraine situation.