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The US Dollar weakened further against its major peers following last night’s publication of the Federal Reserve’s March meeting minutes. The currency fell as the minutes highlighted concerns over persistent low inflation and the lack of direction as to when interest rates will rise. After the minutes were published the ‘Greenback’ fell to a fresh four-and-a-half year low against the Pound.
The Pound was trading weaker against its major peers ahead of today’s Bank of England interest rate decision. Investors raised their bets that the Central Bank will keep rates at the record low-level of 0.5%. The Bank’s board is also expected to be divided over how much spare capacity there is in the UK economy.
The Euro found support on Thursday from the release of better than expected industrial production data out of France. The nation’s inflation rate showed a fall from the previous month however renewing concerns over the threat of deflation in the Eurozone. Better-than-expected trade data out of China also offered some support.
The ‘Aussie’ continued its upward advance against its peers and hit a new four-and-a-half month high against the US Dollar. The currency found support from strong domestic employment data and strong trade data out of China, Australia’s biggest trading partner.
New Zealand Dollar
The New Zealand Dollar remains close to a 32-month high against the US Dollar and continued to push higher against the Pound and Euro following the release of positive domestic manufacturing data. The New Zealand business manufacturing index rose to 58.4 in March, from a reading of 56.5 in February, whose figure was revised up from a previously estimated 56.2. China’s strong trade data also added support.
The Canadian Dollar reached its best level in three-months against its US relation as the Federal Reserve policy meeting minutes suggest that the Bank of Canada may be keeping pace with the US Central Bank in raising interest rates.
South African Rand
The Rand made further gains against its peers as the currency benefitted from a weakening of the US Dollar and the positive data out of China. Increased demand for higher yielding riskier assets has also benefitted the Rand in recent days.