Slow U.K. Economic Growth Curbs Pound’s Strength

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
Euro-zone.
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 three-month low in April, deprives the sterling of its strength. The U.K. budget deficit considered to be the largest among the Group of Seven nations.
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.

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 pre-ordained” sparked the speculation that the interest rates may not be increased by that time.
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
most-traded counterparts as the outlook for Greece to receive the rescue package valued as much as €110 billion ($146 billion) improved the investors’ risk sentiment and attracted them to the South Pacific nation’s higher-yielding assets.
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.
If you want to comment on the New Zealand dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

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.