11th June 2014

Euro weaker after European Central Bank’s monetary policy


Pound Sterling

Euro to Pound

The Pound has climbed following Wednesday’s positive employment statistics. Sterling reached its best exchange rate since November 2012 against the Euro, pushing above 1.24, with an encouraging market movement of +0.29%.

A drop of 0.2% in joblessness has seen the UK record the lowest unemployment rate since 2009. Britain is set to enjoy competitively strong economic expansion throughout the rest of 2014.

US Dollar

Wednesday saw the Dollar soften against the Pound to trade in the region of 0.5940 cents in light of Britain’s positive employment figures. After a harsh winter America is hoping to see positive results for jobless claims and retail sales when the reports are published later today. Both sets of data could boost the US Dollar.

The Euro

The Euro has felt the impact of the European Central Bank’s monetary policy decision all week, leaving it weaker in relation to other major currencies. Industrial Production data released on Thursday have shown a better than predicted 0.8% increase from March, and a 1.4% increase since April 2013, which may help the Euro gain back some strength.

Australian Dollar

The Australian Dollar has been rallying all week, but overnight domestic employment figures showed a jobs decline of 4.8k. Economists had predicted an employment increase of 10k. When viewed in comparison with Britain’s encouraging employment data the result is especially disappointing and the AUD/GBP pairing slipped slightly. However the ‘Aussie’ has risen against the US Dollar to over 0.94 US cents This could change however when US jobless and sales data is released on Thursday.

New Zealand Dollar

The ‘Kiwi’ has risen against the Pound to 0.51 and gained by the most against the US Dollar for four months as a result of the raising of interest rates by 0.25 basis points by the Reserve Bank of New Zealand. Interest rates could rise to anywhere between 4.5-5% and still leave New Zealand comfortable, according to a Royal Bank of New Zealand official, and the New Zealand Dollar could continue to strengthen if the hiking cycle remains on track.

Canadian Dollar

As reports of America’s underestimated stockpile of oil levels emerged and the price of oil rose so did the Canadian Dollar; rising to 0.92 against the US Dollar. Thursday could enhance the Canadian Dollar further if the results of Canadian house price data prove positive. As the new terrorism threat in Iraq continues, the demand for oil may boost the Canadian Dollar higher.

South African Rand

Thursday has seen the Rand firm marginally against the US Dollar, at 0.093. Furthermore positive mining data has been released and shows a 0.2% year on year gain and a 7.9% monthly advance. This could see a further improvement in the Rand and help it recover from a 10 week low.


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