US and Canadian GDP Ecostats Expected to Rock Market, EUR Sensitive amid ongoing Greek Negotiations, Investors Forecast RBA Rate Cut

Published: 29 May at 10 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Greece,

Pound (GBP)

The Pound softened against a host of other peers on Friday after UK Consumer Confidence took a dive. The sentiment index slipped from 4 in April to only 1 in May, despite forecasts to remain at 4. The ecostat came after a period of choppy trading and economic disruption from the UK general election.

The UK Lloyds Business Barometer will be out later in the session and could influence the Pound mildly. With no other influential data out in Friday’s session, the Pound will fluctuate on global developments.

Euro (EUR)

The Euro put in a mixed performance on Friday amid ongoing Greek negotiations. The common currency exchange rate has been extremely sensitive to any developments between Greece and its creditors as the nation attempts to better its austerity package.

However, the International Monetary Fund has warned that the possibility of a Grexit is still very prominent. The IMF also suggested that it’s ‘very unlikely’ an agreement would be met within the next few days. Greece is expected to run out of funds by the start of June.

US Dollar (USD)

The US Dollar has been rising in popularity recently as US data improves and investors’ price in the possibility of a Federal Reserve interest rate hike this year. The central bank had initially suggested a June lift-off could be possible, but after a downturn in domestic data, policymakers began to look at September onwards for higher borrowing costs.

However, Friday could be a major day for US Dollar movement with the release of the US Gross Domestic Product (GDP) figures. Any upbeat data could allow the USD exchange rate to rally.

Canadian Dollar (CAD)

The Canadian Dollar softened against other majors on Friday ahead of highly influential Canadian Gross Domestic Product stats. The year-on-year figure is forecast to remain at 2.1% in March and could be an event to offer the ‘Loonie’ some support.

Another big event for the Canadian Dollar this week was Wednesday’s Bank of Canada (BOC) interest rate announcement. The central bank opted to keep rates on hold in May at 0.75%. Earlier in the year, policymakers conducted a surprise cut which drove the ‘Loonie’ lower.

Australian Dollar (AUD)

The Australian Dollar has remained within a narrow range against some of its major peers on Friday after suffering losses earlier in the week. With a lack of highly influential domestic data out for release, the ‘Aussie’ has been reliant on global developments for movement.

However, the latest Australian Private Capital Expenditure ecostat fell by -4.4% in the first quarter, rather than the 2.2% expected which spurred bets that the Reserve Bank of Australia was likely to cut interest rates again in the near future. The prospect of lower rates can severely impact a currency and the ‘Aussie’ has softened notably.

New Zealand Dollar (NZD)

The New Zealand Dollar had a poor start to Friday’s session, falling against a host of other major peers. The ‘Kiwi’ was offered little support when New Zealand Building Permits shrank by -1.7% in April and March’s figure was negatively revised to 10.3%.

Additionally, New Zealand Business Confidence almost halved in May, falling from 30.2 to 15.7. The latest Fonterra dairy forecast has also weighed heavily on the NZD exchange rate with farmers expected to receive less for their milk products than they currently do.
As of Friday, 29th May 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3915, GBP USD exchange rate was 1.5291, GBP AUD exchange rate was 2.0001, GBP NZD exchange rate was 2.152, and GBP CAD exchange rate was 1.9045.

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