Daily market report
The ‘Greenback’ is mixed against its most traded peers ahead of several Central Bank meetings later in the session. The key piece of data that Dollar traders will be interested in is the latest jobless figures for the world’s largest economy. If the data shows a better-than-expected reduction to the number of Americans out of work then the Dollar will make gains. Expectations for the Federal Reserve to begin tapering its monetary easing programme will also rise.
The Pound has softened against the US Dollar after touching a fortnightly high in yesterday’s session. The decline comes as the market turns its attention to a plethora of data releases which include the European Central Bank and Bank of England’s interest rate decisions and the latest jobless data out of the United States. Each release has the potential to create volatility in the market.
The Euro is weaker against the US Dollar as investors remain cautious ahead of the release of the European Central Bank’s policy statement and the US jobs data later in the day. The Euro is under pressure amid expectations that the ECB will reiterate its pledge to keep rates on hold following its policy meeting.
The ‘Aussie’ weakened from close to a two-week high against the US Dollar as the market awaits the release of the latest US jobs data. The data is expected to show that the number of US citizens out of work fell, reinforcing the case for the Federal Reserve to start tapering its easing programme this month. The speculation over tapering is likely to weaken the emerging and commodity based currencies as investors favour the ‘Greenback’.
New Zealand Dollar
The ‘Kiwi’ followed its Australian relation downward against its peers but was able to retain some strength in local trading after investors became more optimistic over the health of the global economy.
The ‘Loonie’ is little changed against the US Dollar after the currency was supported by higher oil prices and as optimism about faster global economic growth fuelled demand for riskier assets. The decision by the Canadian Central Bank to maintain interest rates remains unchanged.
South African Rand
The Rand is softer against the US Dollar as investors remain wary over the potential for further labour unrest as a strike by gold miners continues. The Rand recovered some ground after the strikers softened their pay rise demands, raising hopes that the dispute could be settled sooner than thought.