Smart Daily Exchange Rates
Last Week This Week
(GBP/EUR – 1.2136) GBP/EUR – 1.2197
(GBP/USD – 1.6636) GBP/USD – 1.6724
(EUR/GBP – 0.8237) EUR/GBP – 0.8197
(EUR/USD – 1.3707) EUR/USD – 1.3710
(GBP/AED – 6.1104) GBP/AED – 6.1402
(GBP/AUD – 1.8480) GBP/AUD – 1.8652
(GBP/CAD – 1.8576) GBP/CAD – 1.8605
(GBP/CHF – 1.4812) GBP/CHF – 1.4830
(GBP/HKD – 12.905) GBP/HKD – 12.980
(GBP/INR – 103.35) GBP/INR – 103.80
(GBP/JPY – 170.39) GBP/JPY – 170.07
(GBP/NZD – 2.0041) GBP/NZD – 1.9870
(GBP/SEK – 10.914) GBP/SEK – 10.797
(GBP/ZAR – 18.356) GBP/ZAR – 17.837
Sterling maintains strength in a quiet week
Sterling had a positive week overall, with the major talking point being the release of growth data showing that the British economy had grown by 0.7% in the final quarter of last year. This helped sterling rise to a one-week high against the euro of 1.22, not that far off the fifteen-month highs seen earlier this month.
Comments from Bank of England (BoE) policymaker Ian McCafferty, who claimed that an interest rate hike could happen in 2015, helped sterling make steady gains against its major trade partners including a rise to 1.6745 against the US dollar, not that far off the four-year-highs seen earlier this month.
Today sees another quiet day from the UK, with data released elsewhere likely to be the major driving force in the markets.
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The euro under pressure after inflation data – more released today
The euro experienced some weakening against the US dollar and sterling this week, although both rates have remained within a relatively narrow range. The euro’s slightly poorer performance was initiated by unimpressive inflation figures released at the beginning of the week. The European Central Bank (ECB) has come under a degree of pressure to combat low inflation and indeed the threat of deflation; this may result in further interest rate reductions when the ECB meets next week – a move that would cause the single currency to weaken sharply.
This pressure was further justified by the European Commission Economic Forecasts, which put Eurozone inflation based on consumer prices at 1% for 2014 – a significant reduction from November’s estimate of 1.5%, and dangerously below the European Central Bank (ECB)’s 2% target.
The euro has the potential to go up or down in a significant fashion today as more key inflation data will be released in the morning. Additionally, the monthly Eurozone unemployment figures could add to aggregated movement in the markets if the figures differ from last month’s release detailing an unemployment rate of 12%, as economic data like unemployment figures contribute to sentiment over the strength of the economy and the strength of a currency by association.
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US Dollar has a mixed week
A mixed week for the US dollar saw the currency initially lose ground against its major trade partners after disappointing results from the US consumer confidence survey, which showed that households in the US were more worried about the state of the economy than was initially forecast. However, figures indicating an increase in new home sales in the past month prompted a recovery for the US dollar on Wednesday.
The US dollar has weakened significantly this morning following last night’s testimony from US Federal Reserve Chair Janet Yellen. This movement came in spite of confirmation that the central bank plans to continue tapering its quantitative easing program unless the economic recovery deteriorates significantly.
Today sees the release of preliminary growth figures from the US, and with a raft of recent weak data from the US, expectations are that the figures will show that growth slowed in the last quarter.
Looking to buy or sell US dollars? Contact your trader not for the latest live rates and for currency-buying strategies.
Poor Chinese data affects global markets
The start of the week saw the impact of poor Chinese housing data being felt by a number of currencies.
The figures from China triggered a decline in global iron ore prices – a significant export commodity of Australia – and the result was the biggest decline in Australian government bond yields in over a week. Traders were nervous that growing Chinese stockpiles on iron ore could substantially drive down the price of the steelmaking material, and this caused the Australian dollar to weaken. It weakened further as the week went on, touching month-lows against sterling as Toyota announced that it would cease its manufacturing of motor cars in the country. This came off the back of other recent withdrawals from Ford and Holden.
The news from China over the weekend had the reverse impact on the Japanese yen and Swiss franc, which took strength from the figures as traders looked to buy into the traditionally safe-haven currency. This strength was then built upon further yesterday amid increasing tension in Ukraine, with Russian President Vladimir Putin reportedly having put fighter jets on combat alert and reports this morning stating Russian military forces are blockading Sevastopol airport in the Ukrainian region of Crimea.
The New Zealand dollar strengthened significantly, touching 6-week highs and climbing by almost a percent against sterling following significantly better-than-forecast trade balance figures. Business confidence figures released early this morning supported this positive outlook for the currency, showing near a 20-year high as firms look forward to strong economic growth.
Looking forward to today we have Canadian growth figures released this afternoon, while overnight tonight we have more influential data in the form of manufacturing figures out of China.
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Smart Daily Exchange Rates
GBP/EUR – 1.2181
GBP/USD – 1.6646
EUR/GBP – 0.8207
EUR/USD – 1.3661
GBP/AED – 6.1136
GBP/AUD – 1.8646
GBP/CAD – 1.8515
GBP/CHF – 1.4828
GBP/CNY – 10.199
GBP/DKK – 9.0902
GBP/HKD – 12.915
GBP/HUF – 377.82
GBP/INR – 103.16
GBP/JPY – 170.17
GBP/NZD – 1.9921
GBP/RUB – 60.058
GBP/SEK – 10.852
GBP/THB – 54.215
GBP/ZAR – 17.980
Sterling strengthens against the euro
Sterling had a positive day yesterday, buoyed by data confirming that the growth in the British economy had increased by 0.7% through the final quarter of last year, pushing sterling to a week high against the euro of 1.218 and not far from the fifteen month highs seen earlier this month. Performance against the US dollar was less promising, with new home sales in the US increasing significantly in the past month which pushed sterling to a low of 1.662 at one stage, although it did stage a mini recovery later on.
Today sees no major data releases from the UK, but attention will be drawn to the US where the release of unemployment claims, along with the testimony from Janet Yellen, Chair of the US Federal Reserve, could result in market movements.
Looking to buy or sell sterling? Contact your trader for live rates, updates and guidance on currency-buying strategies.
Today’s German inflation data a worry for the euro
The euro weakened against the US dollar and sterling yesterday afternoon despite an absence of any major data releases from any of the countries that use the common currency. The weakening of euro against sterling was supported by a statement from Bank of England policymaker Ben Broadbent. He observed that sterling’s current position against other currencies reflected the current strength of the UK economy. This gave investors confidence that the central bank is happy with a stronger pound and is not currently considering any policy changes that would affect this drastically. Sterling’s gain is euro’s loss as the news led the already troubled euro to weaken further..
Today there is potential for the euro to experience a fair amount of movement as a result of some key data releases from within the euro nations. German inflation figures are set to be released and these may have an impact on how the euro performs. The reason for this is because low inflation is likely to spur the European Central Bank (ECB) into taking actions that impact negatively on a currency, such as lowering interest rates, and this action could take place as early as next week as this is when the ECB next meets. In addition to these figures, the Money Supply figures are due out which show how much people and businesses have been borrowing. Higher figures are usually better for a currency as increased borrowing shows confidence in economic conditions. Overall, both of these data sets are typically of moderate importance and are only likely to have a significant impact on the strength of the euro if they deviate notably from the expectations of currency traders and commentators.
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US home sales data boosts the US dollar
The dollar was boosted yesterday following the release of data showing that the number of new home sales in the US had increased significantly over the past month. The sale of new homes has a wide-reaching effect on an economy as a number of industries are involved in the purchase and furnishing of a home; it also shows confidence in the housing sector. Consequently, the dollar performed well against its major currency partners, pushing sterling away from a four-year high against the US dollar despite positive growth figures out of the UK.
Today we are likely to see more movement from the dollar with the release of unemployment claims. This afternoon also sees the testimony from Janet Yellen, the US Federal Reserve Chair, which may provide insight into future monetary policy for the US. This could potentially have significant impact on the strength of the dollar.
Looking to buy or sell currencies? Call your trader now for up-to-date rates, and for guidance on how to minimise risk on currency purchases.
Poor growth forecasts undermine the SA rand
The South African rand lost ground yesterday after a much-needed 7 days of strength. After touching 6-week highs against sterling, comments made by South African Finance Minister Pravin Gordhan yesterday triggered a sell-off from midday. Gordhan lowered the growth outlook for Africa’s largest economy, explaining that growth is unlikely to rise over the next three years. The growth forecast was cut from 3% to 2.7%, which, coming off the back of an unexpected interest rate hike last month, has left the outlook for the rand uncertain.
Political uncertainty in Russia was the catalyst for the rouble weakening throughout the day yesterday. Russian President Vladimir Putin was reported to have ordered military exercises amid increasing tension in Ukraine, particularly in the Crimea region. The news, combined with a general weakness in the rouble, caused the currency to extend to record lows yesterday, with no sign of the slide abating.
Elsewhere, markets were relatively flat yesterday, with currencies such as the Canadian, Australian and New Zealand dollars all trading in a fairly narrow range against sterling. The Japanese yen showed a bit of strength later on in the day.
Overnight last night we had trade balance figures out of New Zealand, and investors will be assessing their effect on the New Zealand dollar today.
Looking to buy or sell currencies? Get in touch with your trader for live rates and currency-buying strategies that can help minimise risk and maximise savings on currency purchases.