Australian Dollar suffers limited confidence
12 December 2016 by News DeskAustralian Dollar lost out to other commodity-correlated currencies despite credit card purchases rising slightly on the year in October.
Australian Dollar remained flat during Monday financial trading as domestic data did little to shore up the ‘Aussie’, according to currency specialists TorFX
Australian Dollar could be bolstered by tomorrow’s NAB business confidence index for November, providing that domestic sentiment is shown to have strengthened on the month.
New Zealand Dollar – Despite another dip in REINZ house sales in November, the New Zealand Dollar has remained on a stronger footing.
Although there are signs that the domestic housing market is beginning to slow, investors appear to remain confident in the outlook of the New Zealand economy.
Markets are also somewhat optimistic with the appointment of new Prime Minister Bill English, who is generally considered to be a safe pair of hands. However, if tonight’s manufacturing data proves disappointing then the ‘Kiwi’ could soon reverse these gains.
Australian Dollar suffers limited confidence
Pound Sterling – Ongoing speculation over the future of the UK economy outside the EU has kept the Pound on volatile form at the start of the week.
Investors remain jittery over the likely deal that the government will strike, which could see the loss of the UK’s privileged access to the single market. Forecasts point towards a sharp uptick in domestic inflation in November’s Consumer Price Index, with a fresh rise in inflationary pressure having the potential to dent Sterling demand. Given that higher inflation is unlikely to encourage greater Bank of England (BoE) hawkishness in the near term, GBP exchange rates could trend lower in response.
Euro – Fresh hopes of support for the beleaguered Monte dei Paschi have helped bolster the Euro today, with investors encouraged by the suggestion that the Italian Treasury is prepared to recapitalise the struggling bank if its cash call fails.
With officials appearing confident that the Italian banking sector will not be plunged into crisis, and with Paolo Gentiloni replacing outgoing Prime Minister Matteo Renzi, the general mood has turned more optimistic. Nevertheless, fresh volatility could be in store if the ZEW economic sentiment surveys for December do not show a further improvement in domestic business confidence.
US Dollar – Ahead of Wednesday’s Federal Reserve policy meeting, the outlook of the US Dollar has been mixed, particularly as the appeal of higher-yielding currencies generally improved.
Markets have already effectively priced in the impact of an imminent interest rate hike, limiting the upside potential of the ‘Greenback’ at this juncture. Even so, USD exchange rates could weaken in response to this afternoon’s monthly budget statement, which is forecast to show a sharp widening of the budget deficit.
Canadian Dollar – Following OPEC’S production cut deal earlier in the month, another eleven countries pledged to lower their oil output over the weekend. This has helped shore up the price of Brent crude, which broke back above the US$57 per barrel mark at the start of the week. As a result the Canadian Dollar found some additional support, although a lack of fresh domestic data could limit this upside potential in the coming days.
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