Currency report by Compare Money Transfer
The ‘Greenback’ made gains against the majority of its most traded peers after the Federal Reserve policy meeting minutes for July showed that Central Bank policy makers supported plans to reduce bond buying this year. The currency received a further boost as economists expect the upcoming housing and employment data to signal a further strengthening of the US economy.
The Pound weakened against the US Dollar after Federal Reserve officials voiced their support for a cutting of the US Central Banks bond buying programme this year. Sterling was also weighed down by comments made by Bank of England policy maker Martin Weale who said that the BOE may need to extend its bond-buying programme if the UK economy stalls.
The Euro edged lower against the broadly stronger US Dollar after the minutes of the Federal Reserve’s latest meeting indicated that policymakers remain divided on when to start scaling back the bank’s stimulus program. The minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to scale back the bank’s USD85 billion-a-month stimulus program.
The ‘Aussie’ rallied against most of its peers after a report showed that China’s manufacturing sector expanded for the first time in four months, boosting Australia’s trade prospects. According to HSBC Holdings Plc and Markit economics the preliminary reading for China’s latest PMI rose to 50.1. Any number above 50 marks an expansion.
New Zealand Dollar
The ‘Kiwi’ fell after the Federal Reserve's minutes showed broad support for unwinding the US Central Bank’s monetary stimulus. The New Zealand currency is also being weighed down by the proposed limits on property lending to help cool rate hike expectations.
The ‘Loonie’ fell to a six-week low against the US Dollar due to the release of the Federal Reserve minutes. Yesterday marked the fourth day of declines for the currency, its longest downward run since June. The Fed minutes led to a broad strengthening of the ‘Greenback’ which came at the expense of the ‘Loonie’.
South African Rand
The Rand plummeted to a new four-year low against the US Dollar after wage talks in the gold mining sector stalled. As a result the country’s main mining union announced that it would prepare to go on strike. The currency was also weighed down by data which showed that inflation accelerated more than expected in July.