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Posted March 14th, 2016 by Charles Purdy

Busy week for central banks

As well as the UK and US central banks meeting this week, we also have the central banks of Norway, Switzerland and Japan meeting. Japan (Tuesday) and the Swiss (Thursday) are unlikely to make any changes at their meetings. Norway, on the other hand, is expected to reduce their interest rate given the parlous state of their economy and their dependence on oil. This should weaken the Norwegian krone.

The Australian dollar had a strong end to the week last week as it gained against all major currency crosses, including 1.5% against the US dollar. Their Australasian counterparts also fared well alongside most commodity currencies, as analysts suggest the worst of the commodity rout is behind us. Looking forward to this week, we have the release of Australian monetary policy meeting minutes early on Tuesday. More importantly, we expect employment data on Thursday’ last month’s results fell below expectation, so markets will be poised around the uncertainty of a turnaround.

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Posted March 11th, 2016 by Charles Purdy

Canadian unemployment data could boost currency

On Thursday, events elsewhere failed to grab headlines in the same way as monetary decisions made in Europe the same day. Canadian house prices held steady at 0.1% despite being expected to grow. The overall effect on the Canadian dollar was minimal as a result. Japanese manufacturing indexes forecasted for growth and this sort of movement would see some strength in the yen as a result.
Another quiet day is expected in the markets outside the US and Eurozone on Friday, with Canadian unemployment data likely to be the most significant data of the day. It is expected to show growth so we could see some added strength off the back of any releases made.

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Posted March 10th, 2016 by Charles Purdy

Will central bank comments shift Canada’s gains?

The Canadian dollar gained traction against its US counterpart after the Bank of Canada kept interest rates at 0.5%, claiming that there was no added risk of inflation. The hawkish comments saw the US dollar fall against the Canadian dollar by 0.53%. Further support for the Canadian currency came as oil prices held firm, due to continued hopes of production cuts. The Australian dollar also continued to gain in strength despite data for home loans coming in at -3.9%, lower than the expected -2.7%.

Today we will see the release of Chinese Consumer Price Index (CPI) data, which is expected to be 1.8%, unchanged from last month, and Chinese Producer Price Index (PPI) data, which is expected to be -4.9%, a slight increase from last month’s -5.3%. Governor Stephen Poloz from the Bank of Canada is also due to speak later in the day, which may cause some market fluctuations.

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Posted March 9th, 2016 by Charles Purdy

Chinese exports fall by more than 25%

Commodity- based currencies flew in face of any positive news releases on Tuesday, instead following an oil and metal futures slump in the afternoon session. The Canadian dollar fell -0.8%, its Australian counterpart dropped by -0.35%, and the New Zealand dollar slid by -0.65%, all against the US dollar.

Also in the news was trade data from China. The country saw its trade surplus shrink from $63.3bn in January to £32.6bn as exports registered a 25.4% decline year on year compared to last month. Combined with the falling oil price from its two-month high as US supplies are seen to be growing, these events could continue to punish commodity-driven countries for a second day in a row.

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Posted March 8th, 2016 by Charles Purdy

Commodity-linked countries on the up

Elsewhere on Monday some commodity- linked currencies gained some momentum during the afternoon session. The Australian dollar rose 0.1% versus the US dollar, exchanging at £0.7447, due to a data release last week that suggested Australia’s real growth for the quarter rose 0.6% quarter-on-quarter in the fourth quarter of 2015 following a 1.1% in the previous quarter.

The Canadian dollar also gained strength against the US dollar, but at a more modest 0.08%. The New Zealand dollar was not among the positive currencies and fell against the US currency by 0.35%.

Tuesday sees a wide range of data in the form of: Trade Balance figures in China; ECO Watchers Survey (assesses short-term economic trends) in Japan; inflation data in Switzerland; Canadian Housing starts; and Card Retail sales and Consumer Confidence Index in New Zealand. All of these have the potential to affect their respective currencies, as well as wider currency markets.

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Posted March 7th, 2016 by Charles Purdy

Rallies Down Under for Australian and New Zealand dollars

The Australian and New Zealand dollars continued their rallies on Friday and finished off the week strong against sterling due to positive Australian retail sales figures released overnight Thursday. At 0.3%, this was an improvement over the previous figure of 0.0%. There was no significant data released for the remaining of Friday, but the price of oil rose after increased US employment gave further momentum to rising prices which did have a positive effect for both the commodity linked currencies.

Today we could see some movement as New Zealand is expected to release manufacturing sales data, while Reserve Bank of Australia Deputy Governor Lowe is expected to speak, which should give an indication of the level of growth within the Australian economy. On Wednesday, the central banks of New Zealand and Canada make their interest rate announcements with the expectation that interest rates will be kept on hold.

There is a whole range of data out of China. Imports are expected to show a contraction of 10% for February year on year, better than the 19% seen in January. Highlights the effect of commodity prices on Chinese imports and the rebound in commodity prices in February. Exports will be going the other direction though as they are expected to show contraction of 15% in February compared to 12% in January year on year. This highlights the problems in the world economy. These figures will be announced on Tuesday.

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Posted March 4th, 2016 by Charles Purdy

Strong day Down Under for Australian and New Zealand dollars

The Australian and New Zealand dollars gained strength against sterling yesterday due to a number of figures, which indicated that their respective economies were expanding. New Zealand released its Commodity Price figures early hours yesterday; these were 0.4% compared to -2.3% previously which had a bullish effect on the currency against its rivals. This was shortly followed by Australian import and export figures, which showed  no change in imports, but a significant improvement in exporting figures, which leapt into positive territory at 1%, compared to -5% previously. These figures, boosted by encouraging trade balance data from Australia, led to positive swings for the Australian and New Zealand dollars against sterling.
Today we expect little movement for both currencies as a result of domestic economic data. This means that they will largely be influenced by events elsewhere.

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Posted March 3rd, 2016 by Charles Purdy

Important data could pick up the pace for the Australian dollar

Tuesday was a relatively muted day in the markets outside Europe and the US, with Australia being the only nation to show any significant data changes.

Australian trade balances were released last night, with numbers expected to show slight growth. This would see the Australian dollar strengthen, given the direct relation of Trade Balances to the nation’s import and export data.

More important data for Australia will be released today, as we expect the announcement of its retail figures to show growth in the region of 0.4%. Traders will undoubtedly keep their ears open for any positive data here, as consumer spending counts for the majority of Australia’s economic activity and will add valuable power to the Australian Dollar.

Today remains another quiet day for data in other world markets, with most eyes on Canada, who will release their Trade Balance, Labour Productivity and Ivey Purchasing Managers’ Index (PMI) data all on Thursday.

Are you planning to buy or sell currencies? Contact your trader today for the latest rates, market news and currency strategies.

Posted March 2nd, 2016 by Charles Purdy

Australian central bank under the spotlight

Aside from our most traded currency pairs on Tuesday it was a fairly quiet day. One pairing that stood out was the Australian dollar, which was weaker against sterling due to comments from the Reserve Bank of Australia (RBA) in their March 1st rate statement that signalled a potential increasing in easing measures. The RBA expressed that “lower inflation conditions ‘would’ provide scope for easing policy”. The market read this as a signal and temporarily curtailed the strength of the Australian currency.

Wednesday sees more data out of Australia with growth and new home sales figures due. Growth is expected to fall from 0.9% to 0.5%, which could mean more weakness for the Australian dollar.

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Posted March 1st, 2016 by Charles Purdy

In brief – Japanese yen, Swiss franc, Canadian dollar, Australian dollar and New Zealand dollar

• Positive construction data from Japan strengthened the Japanese Yen on Monday morning; statistics showed a significant 1.5% increase on previous readings. Japanese household spending figures were also forecast for growth which should lend itself to a strong Yen performance.

• The KOF Economic Barometer revealed positive growth in the Swiss economy on Monday. The barometer accounts for over 219 different economic parameters, including exchange rates, banking confidence and production. Positive data released here guaranteed some strength in the Swiss Franc.

• Three sets of positive Canadian data lent some strength to the Canadian Dollar. The Raw Materials Price Index (RMPI) and Canadian current account data both showed growth, and bolstered the nation’s currency.

• The most important data of the day came from Australia, where the cash rate data was forecast to stay on hold for another month. However, with Building Approvals expected to come up a long way short of the expected mark, the Australian Dollar may be struggling come Tuesday morning.

• On Tuesday, the focus turns to Canadian growth figures released at 8.30am, New Zealand GDT Price Index figures released at 9.30am and Australian GDP rounding off the day at 7.30pm.

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