Exchange Rates Outlook Volatile As BoE And ECB Deliver Interest Rate Decisions

Published: 4 Jul at 10 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Japan, South Africa, Portugal,

Pound Sterling
GBP/USD – Trading in the Region of 1.5255
Yesterday’s stronger than forecast UK services PMI helped the Pound advance on several of its main counterparts. However, the British currency slid to an almost 5-week low against the US Dollar ahead of Mark Carney’s first Bank of England policy meeting. Sterling was little changed against the Euro.

US Dollar
USD/EUR – Trading in the Region of 0.7701
Movement in the US Dollar is likely to be limited today as North American markets close for the July 4th national holiday. However, the safe-haven currency is expected to experience significant volatility in the wake of tomorrow’s influential US non-farm payrolls report.

Euro
EUR/USD – Trading in the Region of 1.2987
While today’s European Central Bank rate decision will be responsible for much of the Euro’s movement today, any additional developments in Portugal will also be of interest. The common currency slumped to an almost month-low against the US Dollar as reports circulated that the Portuguese Government might be about to lose even more ministers.

Australian Dollar
AUD/USD – Trading in the Region of 0.9097
The ‘Aussie’ was able to rebound from an almost three-year low against the US Dollar on investor concern that the currency’s fall had happened too rapidly. Despite data showing that Australian building approvals declined by more than expected, the Australian Dollar was trading more strongly against several of its rivals as the European session began.

New Zealand Dollar
NZD/USD – Trading in the Region of 0.7782
Although higher-yielding assets were hit by a bout of risk aversion inspired by the political instability in Portugal, the New Zealand Dollar was little changed against the majority of its most traded peers. With local news thin on the ground additional ‘Kiwi’ fluctuations are likely to result from news from the Eurozone.

Canadian Dollar
CAD/USD – Trading in the Region of 0.9509
After hitting a 21 month low against the US Dollar the ‘Loonie’ was able to stage a modest rebound as the price of crude oil jumped. However, the commodity-driven currency was adversely affected by the news that Canada’s long streak of merchandise trade deficits was extended for another month. The Canadian Dollar could fluctuate today as a result of news from the Eurozone.

Japanese Yen
USD/JPY – Trading in the Region of 99.7100
Although the US Dollar held steady against the Yen during local trade, the Asian currency was able to advance on a broadly softening Euro and several other higher-risk assets. With political instability in Portugal and tension mounting in Egypt the safe-haven Yen could extend gains before the weekend.

South African Rand
ZAR/USD – Trading in the Region of 10.0530
Prior to the European Central Bank’s policy statement the commodity-driven Rand was slightly firmer against the US Dollar. While news from Europe could cause significant Rand movement today investors will also be taking into account Reuters econometer for South Africa, due for publication at 10:30 GMT.
As of Thursday, 4th July 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1654, GBP USD exchange rate was 1.5041, GBP AUD exchange rate was 1.6457, GBP NZD exchange rate was 1.9241, GBP CAD exchange rate was 1.583, GBP JPY exchange rate was 150.776, and GBP ZAR exchange rate was 15.0929.

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