Australian Dollar struggles to hold ground
04 November 2016 by News DeskAustralian Dollar was impacted as Sterling traders bought up the currency thanks to the day’s news.
Australian Dollar struggled to hold its ground due to waning demand for risk-correlated currencies amid US Presidential election jitters, according to currency specialists TorFX
The day’s Australian data did little to boost demand for the risky Australian Dollar.
Sterling continued to edge higher against the Australian Dollar on Friday despite a confident monetary policy statement from the Reserve Bank of Australia.
The bank stated that housing market risks had eased and that it was in no hurry to cut interest rates again.
New Zealand Dollar (NZD) – The Pound to New Zealand Dollar exchange rate used Thursday’s session as the perfect opportunity to leap out from the record-low values seen earlier in the week.
By Friday morning, GBP/NZD was trending just above the week’s opening levels once again and continued its advance.
Sturdiness in the Pound after Thursday’s rally, as well as diminishing support for risky currencies like the ‘Kiwi’, made it easy for GBP/NZD to hold most of its Thursday advances.
Australian Dollar struggles to hold ground
Pound Sterling (GBP) – The Pound soared across the board on Thursday, enjoying its best daily surge since July thanks to a double-whammy of good news for UK investors.
Thursday morning saw the British High Court make its ruling on the legality of the government activating Article 50 and beginning the formal Brexit process without consulting Members of Parliament. Three High Court judges deemed it unconstitutional to pass Article 50 without some say from MPs, which bolstered hopes that MPs would fight for a softer Brexit with access to the European Union’s single market.
The next boost given to the Pound came as a result of the Bank of England’s (BoE) November policy meeting, at which officials unanimously left policy frozen and upgraded its 2016 and 2017 growth forecasts, indicating there was confidence in the UK’s current economic performance despite the Brexit vote in July.
Sterling is likely to hold its ground as the week comes to an end after making one of its best recoveries in recent weeks.
US Dollar (USD) – The US Dollar continued to trend sluggishly on Thursday. While this week’s ‘Greenback’ market selloff slowed compared to past days, demand for the currency was still low, allowing the Pound to easily capitalise thanks to the day’s double whammy of UK news.
The United States’ 2016 Presidential election is now only 4 days away and the race between Democrat Hillary Clinton and Republican Donald Trump continues to tighten, sending markets away from the US Dollar and into other traditional ‘safe haven’ investments.
Thursday’s US data did little to help sentiment for the Dollar. ISM’s services/non-manufacturing composite PMI for October came in at a surprisingly low 54.8, falling from 57.1. Durable goods orders also performed poorly, with the final score failing to meet preliminary results and printing at -0.3%.
Euro (EUR) – The Pound to Euro exchange rate surged on Thursday as the Pound was bolstered by news from a High Court ruling on Article 50 as well as the latest policy decision from the Bank of England (BoE).
After Wednesday’s slew of optimistic Eurozone data, Thursday’s lighter economic calendar still gave the Euro some support. The Eurozone’s September unemployment rate scored 10.0% as expected, but this report also confirmed that August’s unemployment rate was actually 10.0%, being revised from the previously worse score of 10.1%.
Sterling was also able to firm against the Euro as many of the Euro’s recent US Dollar-correlated gains were shed.
Canadian Dollar (CAD) – The Pound to Canadian Dollar exchange rate was easily able to surge and sustain its daily advances on Thursday, as the weak ‘Loonie’ made for easy gains.
As Sterling advanced on High Court and Bank of England (BoE) news, the Canadian Dollar continued to be slump on commodity news. Prices of oil, Canada’s most lucrative commodity, have not had the best of weeks and according to analysts were set for a sixth day of consecutive losses on Friday. This, as well as lower demand for risky currencies due to the proximity of the US Presidential election next week, left the ‘Loonie’ falling throughout the day.
Disclaimer: This update is provided by TorFX, a leading foreign exchange broker, its content is authorised for reuse by affiliates.
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