Pound Sterling
The Pound leapt to its highest level in more than a week against the Euro and hit a three-week high against the US Dollar as speculation continues to build that the Bank of England will raise interest rates earlier than expected as the UK economy improves. The minutes for the BoE’s November meeting were largely ignored as investors instead focused on last week’s UK unemployment data for guidance.
Currently the Pound is trading in the region of 1.1926 against the Euro and 1.6124 against the US Dollar.
US Dollar
The ‘Greenback’ fell against the Pound as demand for the US currency fell ahead of the release of the minutes for the Federal Reserve’s monetary easing scheme. The currency was weighed down by a worse than expected decline in house prices and inflation. The Dollar strengthened against the Euro after the single currency went into decline due to comments made by ECB policymakers.
Currently the US Dollar is trading in the region of 0.6201 against the Pound and 0.7396 against the Euro.
The Euro
The Euro tumbled against the Pound and other major peers due to rumours that the ECB is considering making a smaller-than-normal cut to its deposit rate if policy makers decide to take it negative. Members of the ECB governing council also warned that the consequences of using negative rates are not clear.
Currently the Euro is trading in the region of 0.8385 against the Pound and 1.3520 against the US Dollar.
Australian Dollar
The ‘Aussie’ spent the session weaker as investors expect tomorrow’s speech by Reserve Bank of Australia governor Glenn Stevens will be negative. The RBA has said recently that it wants the currency weaker and Stevens’ speech is a prime time to try and talk it down. The currency was weakened further after the RBA’s assistant governor Guy Debelle said that the bank would prefer the exchange rate to be weaker. The comments made by the Federal Reserve Ben Bernanke offered little support to the Australian currency. The currency fell against the Euro and many of its most traded peers.
Currently the Australian Dollar is trading in the region of 0.5829 against the Pound, 0.6951 against the Euro and 0.9398 against the US Dollar.
Canadian Dollar
The ‘Loonie’ made gains against the Euro and other peers after Fed Chairman Ben Bernanke suggested that no tapering to the US Central Banks easing programme will occur until next year. Risk appetite improved benefiting the Canadian currency. The currency’s gains are likely to be reversed by a speech from Bank of Canada Governor Stephen Poloz to a Senate Committee on Banking, Trade and Commerce which is expected to expand on the need for an accommodative monetary policy.
Currently the Canadian Dollar is trading in the region of 0.5928 against the Pound, 0.7070 against the Euro and 0.9558 against the US Dollar.
