Australian Dollar advances

29 September 2016 by News Desk   |   SHARE  

Australian Dollar briefly pushed GBP AUD during the earlier hours of the day as risk-sentiment remained strong.

Australian Dollar, following Tuesday’s risk-correlated rally, regularly returned to the day’s opening levels and by the end of the day had made little progress in either direction, according to currency specialists TorFX

The Australian Dollar and Pound continued their advance attempts on Thursday morning, but British data was not influential enough to encourage Sterling investors.

New Zealand Dollar (NZD) – The Pound to New Zealand Dollar exchange rate was able to advance in Wednesday trade as jitters on talk of Reserve Bank of New Zealand (RBNZ) rate cuts and easing weakened the ‘Kiwi’ across the board.

While the pair slipped slightly on Thursday morning, GBP NZD remained nearer the week’s opening levels despite approaching record-low levels on Tuesday.

Australian Dollar advances

Pound Sterling (GBP) – Sterling saw mixed movement throughout Wednesday’s session, initially trading strongly on comments from Bank of England Governor Mark Carney that suggested Britain’s long-term economic prospects were generally positive. However, Deputy Governor Minouche Shafik indicated later in the day that further BoE monetary easing was likely in the near future.

Sterling was ultimately unable to make any significant movements in either direction against most currencies, trending flatly on Wednesday afternoon amid a lack of supportive data. BoE easing bets will continue weighing on Sterling advances, but the currency could begin a more solid recovery if Friday’s final Q2 GDP beats expectations.

US Dollar (USD) – The ‘Greenback’ strengthened on Wednesday afternoon in response to August’s US preliminary durable goods orders figures, which beat expectations of a -1.5% contraction by scoring a stagnant 0.0%. The durables excluding transportation figure came in at -0.4%, slightly lighter than the predicted score of -0.5%.

Later in the afternoon, Federal Reserve Chairwoman Janet Yellen made a speech that was largely to do with supervision and regulation of markets. However, Yellen did mention most policymakers considered the current level of US growth to be enough to support an interest rate hike in the coming months. This was not enough to boost the US Dollar considerably, as it was largely a repeat of the stance taken in last week’s disappointing Fed policy decision.

Euro (EUR) – The Pound to Euro exchange rate trended flatly on Wednesday afternoon after fluctuating earlier in the session, as Euro investors panicked and then settled over the day’s progress in the Deutsche Bank crisis.

The crisis in the German banking group began due to low profitability and a US$14bn fine from the US justice department, which saw Deutsche Bank shares plummet to record lows. Markets were briefly cheered by rumours that the German government was preparing a rescue plan for the bank, but the govt was quick to deny this. Ultimately however, analyst comments that the panic regarding the bank’s situation had been somewhat overblown and that the situation would likely remain under control limited Euro losses.

Canadian Dollar (CAD) – The Pound to Canadian Dollar exchange rate plummeted on Wednesday night, as OPEC – a group of oil-producing nations – shocked markets by announcing that members would attempt to stimulate oil prices by putting a cap on oil production despite lingering doubts over the possibility of a deal.

GBP CAD trended below the week’s opening level on Thursday morning despite advancing up until Wednesday. However, the pair edged upwards on Thursday as markets reacted to the OPEC deal and began to speculate that the deal may not actually change much. Many non-OPEC members such as Iran, Nigeria and Libya will continue to push up oil production as they re-enter the market, which could see oil prices remaining low.

Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.

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