The Great Britain pound slipped today on the speculation that the attempts to deal with the budget deficit may be hindered by the slow growth of the U.K. economy, which expanding with slower pace than the economies of the U.S. and the
The U.K. economy expanded by 0.2 percent in the first quarter, while the U.S. economy grew at a 3.2 percent annual rate at the same time. The declining consumer confidence in Britain, which dropped to the
The opinion polls showed that the concern for the stalemate in the Parliamentary election remains. Such pessimistic outlook causes worries that the Britain’s troubles will persist.
GBP/USD traded at 1.5277 today as of 19:05 GMT down from the opening rate of 1.5317. EUR/GBP traded at about 0.8711 after it opened at 0.8637. GBP/JPY traded near 143.53.
Slow U.K. Economic Growth Curbs Pound’s Strength
Loonie Goes Down on Falling Equities
The Canadian dollar declined against its U.S. counterpart and other major currencies after the equities dropped on the speculation that the federal prosecutors investigating whether to file the criminal fraud charge against the Goldman Sachs Group Inc.
The decline of the stocks outweighed the expectations for Greece to receive the aid package soon and the report about the expanding nation’s economy, which previously spurred the Loonie, as the Canadian currency nicknamed for the image of the aquatic bird on the C$1 coin.
The doubts about the increase of the interest rates are also sapping the Loonie of its strength. Previously the Bank of Canada dropped the conditional pledge to keep the benchmark rate at the record low level of 0.25 percent and hinted that the rates can be increased in June. Yet the words of the central bank’s governor “going forward, nothing is
USD/CAD closed at 1.0156 after opening at 1.0047. EUR/CAD closed at 1.3521 after it opened at 1.3295.
Pound Dropped This Week as Consumer Confidence Declined
The Great Britain pound experienced some volatile moves this week and by the weekend the currency declined against most other majors as the Parliamentary election draws near without signs of clear winner and as the households had the pessimistic outlook for their financial situation, causing the consumer confidence to worsen.
The data about improving situation in manufacturing and services industries, caused by the U.K. economy’s recovery, hadn’t brought enough confidence to the Britons. The outlook about the personal financial situation dropped to 2 points from 4 points the last month, while the consumer confidence fell from minus 15 to minus 16 this month. Some positive data from the housing sector, which somewhat boosted the sterling, hasn’t outweighed the consumer pessimism together with the signs of the slow economic recovery and, as a result, the U.K. currency dropped by the end of the week.
The opinion polls about the election don’t bring relief either. The forthcoming election may result in the stalemate and, while the three participating parties all pledged to reduce the budget deficit, which increased as much as 11.5 percent of GDP in 2009 and is considered the biggest among the Group of Seven nations, the parties disagree on the exact measures and the timing for them.
High Risk Appetite Boosts New Zealand Dollar
The New Zealand dollar rose today against other
The investors are attracted to New Zealand because of its high interest rates, which is 2.5 percent, compared to 0.1 in Japan and about zero in the U.S., but as such trades carry risk that the profits would be erased by the moves at the currency markets, the investors’ risk appetite has to be high enough to encourage them use differences in the interest rates. And the prospect for the Greece to receive the aid soon makes the investors more willing to risk.
NZD/USD traded near 0.7294 as of 11:57 GMT today after it opened at 0.7291. EUR/NZD traded at about 1.8137 after opening at 1.8275.
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Concern About Greece’s Bailout Hurts Euro
The euro dropped today as the doubts arouse that Greece won’t receive the €110 billion aid package, which are supposed to be provided by the European Union governments and the International Monetary Fund.
The EU leaders are going to discuss at their meeting on May 7th the details of the bailout, which may require from Greece to cut its budget spendings. Such measures are considered too severe by the Greece’s citizens and are speculations about the possible budget cuts caused protests among Greeks.EUR/USD dropped to 1.3234 today as of 13:27 GMT from the opening level of 1.3329.
Canadian Dollar Goes Up on Commodity Prices, Rising Stocks
The Canadian dollar advanced today as the crude oil prices surged to the highest level since September 2008, U.S. stocks gained and gold climbed to the highest level since November 2009.
The Canadian currency depends on the prices for the commodities, especially crude oil, being the key export commodity of the nation, therefore the price increase bodes well for the Loonie. The expectation for the central bank to increase the interest rates as soon as of June or by July also supported the currency’s performance.
Still, the concern that the bets for the rates increase were overdone has already slashed the currency previously, so many economists look forward for the central bank’s meeting in June to clarify the Loonie’s future moves. The reports about the employment this week may give suggestions to the Canadian dollar’s performance in the near term.
Zloty Hits Record High on Rate Talks
The Polish zloty is facing a scenario different from its neighboring currencies in the Baltics, central Europe and the euro as interest rates may rise in the following months to control the country’s growing inflation, helping the zloty to climb in forex markets this Thursday.
After a Polish government official stated that interest rates may be hiked in the second half of this year to prevent inflation to grow beyond the nation’s targets, the zloty reached the highest price in more than a year versus the currently unattractive euro.
EUR/PLN closed at 3.8963 from an opening rate of 3.9088 this Thursday.
IPO Boosts Demand for Brazilian Real
The Brazilian real is starting this month extending last week’s advance and reverting a negative trend from the beginning of the year, as the appeal for assets in the country are attracting foreign capital inflows and helping the real to beat a number of currencies in
Brazil has one of the highest interest rates around the world and renewed appetite for risk in equities markets are allowing the South American currency to post a series of gains versus important currencies with different economic profiles, specially before an IPO in Bovespa which may raise up to $5 billion, considering a significant part of this amount composed by foreign capital. Interest rates in Brazil may rise also in the following months, making the real to repeat last year’s story with the Aussie dollar to rank among the top performing currencies in forex markets.
Optimism is back, and now that pessimism coming from EU’s fiscal crisis and new lending requirements in the U.S. and China cooled down, the scenario for the real has really improved. If risk appetite continues to climb to real may reach new record lows, specially versus the pound and the euro.
USD/BRL closed this Monday at 1.7985 from an opening rate of 1.7995.
Euro Up on Greek Hopes
The euro emerged versus several important currencies as Greece will propose a strategy to solve its budget deficit crisis, declining pessimism among investors to purchase assets in the Eurozone.
The Eurozone had a breather today after Greece, the main responsible for the euro’s most recent downtrends, announced through government officials that decisions are likely to be presented anytime to soon to tighten the countries massive budget deficit, increasing optimism that the fiscal crisis is likely to find a solution in the
EUR/USD traded at 1.3633 as of 02:49 GMT from a previous intraday rate of 1.3517.
Chilean Peso Climbs After Earthquake
The Chilean peso oddly profited from a natural tragedy that impacted the country in the first night of this month, as speculations suggest that the reconstruction process in the country, will allow the country’s economy to accelerate.
The South American country is likely to repatriate reserves invested overseas to promote a quicker restructuring in the country after Chile was shook by an earthquake this weekend, allowing the peso to rank among the best performing currencies this Tuesday in forex markets.
USD/CLP closed at 519.05 this Tuesday from an opening rate of 523.25.
Dollar Down after European News
The dollar started this Tuesday losing versus European and
The pound managed to gain versus the dollar and traded above $1.50 ending the longest losing streak versus the U.S. currency in more than a year, after consumer confidence rose in the country to the highest level since the global slump affected the U.K. in 2008. The dollar has been losing ground this week versus the euro as concerns regarding the Greek crisis decreased, and today, after the country announced further cuts to tighten its budget gap, the Eurozone currency rose.
Much of the dollar’s advance since last December had been consequences caused by lack of optimism in European markets, but, this week, after interest rate speculations decreased in the U.S. and Europe had a breather on bad news, the market scenario is not so favorable for the greenback anymore.
GBP/USD traded at 1.5051 as of 14:01 GMT from 1.4964. EUR/USD traded at 1.3652 from 1.3571.
Consumer Confidence Support Sterling’s Advance
The U.K. currency entered its second day of gains versus most of the main traded currencies after evidences of economic improvements started to appear in the country, increasing appetite for assets in the country, which have been lately affected by grim forecasts towards the kingdom’s economy.
Two positive economic releases helped the pound to beat multiple currencies this week so far after an index of services industries rose to the highest levels since the global slump struck the U.K.’s economy, and a consumer confidence report came with numbers much above forecasts, signaling that despite the country’s budget deficit is rising, the economic dynamism in the country may allow the government to cope more easily what the current financial challenges in the country.
Swedish Krona Down on Eurozone Optimism
The Swedish krona fell for another day this Wednesday as optimism in the Eurozone and negative releases in the Nordic country declined attractiveness regionally for assets in Sweden.
The krona is very likely to end this week posting a drop versus important currencies in Europe after a report in the country showed that Sweden is again having to deal with a recession, declining the odds that interest rates will be hiked in the country anytime soon. The krona had been an option in Europe as the Greek crisis affected market sentiment in the Eurozone, but this week, as Greece proposed new measures to tighten its fiscal deficit, the euro recovered versus the krona.
EUR/SEK traded at 9.7878 as of 14:39 GMT from 9.7700 when markets opened today.
Pound Declines Before Policy Makers Meeting
The pound lost versus several
The British currency posted a declining session versus most of the 16 main traded currencies two days before a Bank of England policy makers meeting, where, according to analysts, the current asset purchasing program will not be suspended, declining even further attractiveness for the pound, as the recession in the U.K. remains rather significant and measures are necessary to attempt starting a faster economic acceleration in the country. Even if the real estate market is providing positive data in the U.K. since November, the sentiment regarding the economic future in the nation is rather misty, stopping the pound to advance in
U.K.’s central bank strategy is following a different, and dovish, path than most of the wealthy nation’s policy makers. While interest rate hikes talks are a global trend, in the U.K., quantitative easing extensions are still possible, and this has a intense impact in the pound’s rates.
EUR/GBP traded at 0.8979 as of 19:10 GMT from a previous reading of 0.8945 yesterday. GBP/USD traded at 1.5983 from 1.6090.
Romanian Leu Hits 6-Month High as Political Crisis Eases
The Romanian leu rallied today versus the euro and the U.S. dollar as interest rates were unexpectedly cut in the country after a political crisis that delayed an IMF bailout finally ended, adding confidence that stability in the parliament will lead the nation towards a faster recovery.
After interest rates were cut today to 7.5 percent at the lowest level in a year, the leu rose versus most of the main currencies, as a political crisis ended regarding disputes that affected the process of obtaining and using a $30 billion bailout provided by the International Monetary Fund to the Eastern European nation. The optimism regarding better economic days for Romania with political stabilization helped the leu to rally today.
EUR/RON closed at 4.1838 from an opening rate of 4.2137. USD/RON ended the day at 2.9033 from 2.9139.
Mexican Peso Extends Rally on U.S.
The Mexican peso is benefiting from the U.S. economic outlook for 2010, as Mexico has the U.S. as the main destination for its exports, both raw and manufactured, and an accelerated growth of its neighbor is helping Mexico’s currency to gain in
The peso continued to profit today from a better confidence towards its main trading partner, the U.S., as well as for increased crude oil rates, since the Latin American nation is one of the main oil suppliers for the U.S. together with Canada, helping the peso and the loonie to trade high in the beginning of 2010.
USD/MXN traded at 12.8190 as of 20:13 GMT from an opening rate of 12.8750.
