Exchange Rate Round-Up: EUR, CAD, NZD and ZAR
With nothing by way of domestic data today the Euro has experienced minimal gains versus most of its major peers. The gradual gains are likely to be connected to the forthcoming speech from European Central Bank President Mario Draghi at the Jackson Hole symposium tonight. An economist writing for eFXnews explains this stating; ‘ECB communication since the June policy easing package has clearly signalled that the ECB believes that those policy measures will be sufficient to eventually bring inflation in line with target. […] At the very least we suspect Draghi will be cautious not to stand in the way of the recent depreciation in the EUR, which in the eyes of most Governing Council members probably remains preferable to QE as a means to move inflation closer to the objective’.
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Next Wednesday’s German Consumer Confidence Survey will be of interest given that recent German domestic data has been a mix bag.
Today has seen a set of negative Canadian domestic data releases. The year-on-year Core Consumer Price Index published growth of 1.7% which was below the forecast figure of 1.9%. Year-on-year Consumer Price Index also fell below expectations having only grown by 2.1%.
The Canadian Dollar has softened since the release of these data publications, but it may recover some of its losses as Federal Reserve Chair Janet Yellen gave a dovish speech at the Jackson Hole symposium, which is likely to see traders pulling away from the US Dollar.
New Zealand Dollar (NZD)
The New Zealand Dollar has continued to extend losses versus most of its major peers following waning consumer confidence and falling dairy prices.
With a lack of domestic data expect the ‘Kiwi’ (NZD) to continue to decline. Monday’s trade balance data will be of significance as the first domestic data release since the previous Thursday.
South African Rand (ZAR)
Similarly to the New Zealand Dollar, the South African Rand has had nothing by way of domestic data to provoke movement.
It is likely to continue decline as investors pull away following the Moody’s downgrades to four South African banks yesterday. Despite the South African Reserve Bank insisting that the country’s banking sector is still ‘healthy and robust’ traders have pulled away from the Rand in order to avoid risk.
Next Tuesday’s South African Gross Domestic Product data will be of vital importance to gauge the South African economic standing and is certain to provoke movement for the Rand.