Australian Dollar finds positive territory

24 August 2016 by News Desk   |   SHARE  

Australian Dollar rates remained largely in positive territory today.

Australian Dollar rates have been influenced by factors including the construction sector where output on the whole was poor in the second quarter of 2016, but government spending increased markedly, according to currency specialists TorFX

Investment in new infrastructure projects has risen significantly, helping the Australian economy to transition away from its reliance on mining without overly upsetting the economy.

Also, while construction output decreased by more-than-expected, the number of approvals for new buildings on an annualised basis climbed to an historical high, suggesting strong output in the coming months

As a result the Australian Dollar is largely in positive territory today.

New Zealand Dollar – Despite poor trade data and fresh warnings over the housing market, the New Zealand Dollar is trending bullishly today.

The trade balance saw a larger-than-expected fall into deficit after last month’s surplus, which itself was revised lower. The shortfall is the first time in seven months that New Zealand hasn’t posted a trade surplus.

Meanwhile S&P warned that New Zealand’s housing market posed a risk to banks. However, S&P left their ratings for the banking sector unchanged; a move which has cheered the markets.

Australian Dollar finds positive territory

Pound Sterling – Pound Sterling is largely strengthening today, boosted by resilient mortgage demand. Markets had feared that mortgage approvals figures from the British Bankers Association would show a significant drop off.

While the report showed a smaller number of approvals than had been forecast – the lowest since January 2015 – the final figure still represented strong demand, given the recent warnings over the health of the property market. This has boosted the Pound thanks to market relief that the Brexit appears not to have impact property demand to the extent predicted.

Euro – German GDP figures for the second quarter may have held steady at their earlier estimated levels, but the Euro is on the decline today. This is partly due to the fact that Germany has posted an increased budget surplus of €18.5 billion for the first six months of 2016, representing 1.6% of GDP and putting the country on track to eclipse last year’s annual surplus of €30 billion.

This hasn’t cheered the markets, as it highlights the growing disparity between the Eurozone’s powerhouse economy and its other struggling member states. With the European Central Bank struggling to boost inflation, the fact that Germany is sitting on a large pile of cash, rather than spending it to help the currency bloc, is likely to fuel further tensions.

US Dollar – The US Dollar is currently weak ahead of the release of several pieces of economic data later today. MBA Mortgage Applications, the house price index and existing home sales figures will all help investors gauge the strength of the property market in the US.

With the Federal Reserve’s Symposium quickly approaching, any point of concern in the data will be seen to impact on the outlook of US monetary policy. It is therefore likely that the US Dollar will react more strongly to the latest reports than it would were Janet Yellen not expected to signal further policy tightening in the near-term on Friday.

Canadian Dollar – The Canadian Dollar is weak today. Market sentiment is likely soured by the news that Finance Minister Bill Morneau’s council of advisors is scheduled to meet again to attempt to find ways to boost the sagging Canadian economy. Additionally, after managing to make a small recovery during the North American session yesterday, crude oil is once again on the decline.

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