Australian Dollar rally cut short
09 September 2016 by News DeskAustralian Dollar rates reflected the currency’s attempt to push a weaker Pound down to GBP/AUD’s worst levels in a week.
Australian Dollar and its’ limited risk-inspired rally was ultimately cut short on Thursday afternoon as the European Central Bank and slightly influential US data called investors back to premiere currencies like USD and EUR, according to currency specialists TorFX
As a result, the ‘Aussie’ slipped, allowing Sterling to recover on Friday morning. The Australian Dollar may also have been slightly weakened by disappointing domestic home loans data for July, that came in with a contraction of -4.2%.
New Zealand Dollar (NZD) – The New Zealand Dollar became limp on Thursday after its massive Wednesday gains, allowing Sterling to retake around half of its lost levels.
On Friday morning, GBP/NZD trended almost two cents below the week’s opening levels. However, as the New Zealand Dollar was left weak by a market flow towards the US Dollar and Euro, the Pound may be able to recover some losses.
Australian Dollar rally cut short
Pound Sterling (GBP) – The Pound slipped against the majority of its major rivals yesterday, falling further from the week’s opening levels as investors turned their attentions to the Eurozone following the European Central Bank’s (ECB) September policy meeting.
The Pound lacked supportive data to help it maintain higher levels on Thursday following Wednesday’s manufacturing results and Bank of England (BoE) comments. As a result, investors continued to adjust the Pound lower, with Brexit concerns still taking hold.
Friday’s UK data, which included July’s update to the British trade deficit, came in below expectations and failed to give the Pound a supported recovery.
US Dollar (USD) – The Pound to US Dollar exchange rate slipped on Thursday, falling even further away from its weekly highs and trending closer to the week’s opening levels despite the bullishness seen on Tuesday.
While bets of a September Federal Reserve rate hike remained low, the US Dollar is still the world’s premiere currency and as a result its weak-streaks rarely last for an extended period. Investors used relatively solid jobless claims figures published on Thursday afternoon as a foothold, bringing the Dollar out of its slump slightly.
The number of ongoing jobless claims came in lower-than-expected this week, at 2,144k. While a surprise drop in oil stocks was reported, the US Dollar was also boosted slightly by a solid consumer credit report from July – improving from $12.230b to $17.713b.
Euro (EUR) – The Pound to Euro exchange rate slid lower throughout Thursday’s session as investors solidified their positions on the Euro running up to and following the European Central Bank’s (ECB) September policy meeting.
In its first meeting since July, there had been wide speculation that the bank would offer up some sort of expansion to its aggressive 2016 stimulus policies. While analysts generally agreed that no action would be taken, ECB President Mario Draghi’s hesitation to hint at future easing measures was seen as surprisingly hawkish.
While investors may have planned to sell off the Euro following a dovish meeting, Draghi instead expressed confidence that the Eurozone would experience gradual growth and recovery, also noting that the Brexit vote had slowed recovery somewhat. This meant investors continued to pile into the Euro following the meeting, as investors slightly set back their ECB easing bets.
Canadian Dollar (CAD) – The Pound to Canadian Dollar exchange rate fluctuated in a relatively narrow range on Thursday, as the Canadian Dollar continued reeling from Wednesday’s bearish Bank of Canada (BOC) meeting.
The ‘Loonie’ has done its best to hold firm this week despite underwhelming domestic data, thanks to generally positive oil news. As oil is Canada’s most lucrative commodity export, CAD often benefits from increases in oil prices – and oil has fared decently this week, avoiding losses amid speculation of an oil production freeze as well as surprisingly low oil stocks in the US.
Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.
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