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Australian Dollar suffers limited appeal

02 December 2016 by News Desk

Australian Dollar upside factors are limited today despite Australia’s October retail sales results coming in at a better-than-expected 0.5%.

Australian DollarAustralian Dollar has been relatively unappealing due to widely volatile and unpredictable iron ore prices, according to currency specialists TorFX

The day’s US Non-Farm Payroll results could also prove a threat to global risk sentiment, including the Australian Dollar, if they score solidly.

New Zealand Dollar (NZD) – The Pound to New Zealand Dollar exchange rate saw similar movement to GBP/AUD on Thursday.

However, despite just recently pulling away from its worst levels on record, GBP/NZD is around two cents away from levels of key psychological resistance that may limit its upward potential in the coming weeks.

As it stands however, GBP/NZD is on track to end this week just above its opening levels.

Australian Dollar suffers limited appeal

Pound Sterling (GBP) – Sterling surged on Thursday, but by the end of the day had given up much of its gains.

UK markets turned bullish after Brexit-related comments from Eurogroup President Jeroen Dijsselbloem. Dijsselbloem stated that the European Union may find a way to give UK access to the internal market. This was quickly (but unrelatedly) followed by comments in UK Parliament from Brexit Secretary David Davis, who stated that the UK may be able to pay for access to the EU’s single market after the Brexit process ends.

US Dollar (USD) – The Pound to US Dollar exchange rate briefly soared to its highest point since early October during Thursday’s session. While GBP/USD slipped back from its highs by the end of the day, the pair continued to trend with an upwards bias and by Friday morning looked to end the week higher.

Sterling was bolstered by comments from UK Brexit Secretary David Davis while the US Dollar was weakened by worse-than-expected jobless claims results during the American session.

However, ISM’s November Manufacturing results beat expectations, which limited the US Dollar’s losses.
US markets are jittery ahead of Friday’s US Non-Farm Payroll report, and while it would take a damning report to move December Fed rate hike bets down from 99% a lower-than-expected score could spur on a USD selloff.

Euro (EUR) – The Pound to Euro exchange rate surged to its best levels in around three months during Thursday’s session thanks to the latest market hopes of a soft-Brexit, while the Euro was held back by underlying jitters ahead of this weekend’s votes in Italy and Austria and next week’s European Central Bank (ECB) meeting.

Despite the shared currency’s poor performance throughout the day, Thursday’s Eurozone results were actually generally impressive. November’s final Eurozone manufacturing PMIs hit 53.7, as forecast, despite a worse-than-expected German manufacturing score. The Eurozone print was boosted by strong performance in The Netherlands, Austria and Spain.

Even more impressive was the surprising news that Eurozone unemployment had improved from 10% to 9.8% in October, while September’s score was revised to 9.9%. This was the bloc’s best unemployment result since 2009.

Canadian Dollar (CAD) – The Pound to Canadian Dollar exchange rate failed to hold any of its Thursday gains as mixed demand for risky currencies throughout the day was just enough to see the ‘Loonie’ benefit from ongoing oil price increases.

Prices of Canada’s most lucrative commodity continued to benefit from Wednesday’s news that OPEC planned to cut oil output by 1.2m barrels a day, and as a result the oil-correlated Canadian Dollar saw solid trade.

However, depending on Friday’s US Non-Farm Payroll results, risk-sentiment among traders could fade away entirely, which could allow GBP/CAD to advance before the weekend.

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

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