Pound Sterling (GBP), US Dollar (USD) Exchange Rates Fluctuate; Commodity Currencies Continue to Suffer From Lack of Demand (AUD, NZD, CAD)
Pound Sterling Exchange Rate goes steady against Euro (GBP/EUR) and Australian Dollar (GBP/AUD)
Following the Bank of England’s (BOE) release of its Monetary Policy Committee (MPC) minutes at 9:30am (GMT), the Pound advanced bullishly on several of the major global currencies, including the Euro (0.8%, 1.4357), the Australian Dollar (1.2%, 2.1215), the New Zealand Dollar (1.3%, 2.3810) and the Canadian Dollar (1.2%, 2.0390). This news comes despite the Committee voting unanimously to hold the UK’s key rate at 0.5%, thereby keeping interest rates at the same record low in place since March 2009.
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Greece remains a Thorn in Euro’s (EUR) Side; Reverse of July 21st EUR/GBP Exchange Rate Gain
The Euro was at a disadvantage in the GBP/EUR exchange rate today and the Pound advanced by 0.8% in the wake of the BoE minutes being released, a bounce back on yesterday’s loss of 0.6% for the Pound. In spite of this gain for GBP, issues surrounding the future of the Eurozone continue to have an impact on the BOE’s decision making; the troubles generated by Greece’s position and standing in the Eurozone were listed as a ‘very material factor’ in the BOE’s decision to maintain the UK’s low interest rates, according to the minutes. The ‘Chunnel’ exchange rate met a high of 1.4310 today, a reduced figure compared to 1.4395 recorded over Sunday and into Monday, but still a significant improvement over the current monthly low of 1.3904 recorded on July 11th.
US Dollar (USD) Rises Overall, Housing Data Likely to Cause Movement
The US Dollar has seen positive growth today, likely due to the country being poised to release index, sales and inventory figures for a number of key industries, such as the Housing Market and domestic inventories of commodities like distillate and gasoline. Forecasts are optimistic across the board, with today’s results seeming to indicate growth in both the Housing Price Index and Existing Homes Sales figure, with projections listed at 0.4% and 0.9% respectively. The USD saw gains against most currencies today, with one of the few exceptions being against the Pound, where the ‘Greenback’ fell by 0.5%.
‘Aussie’ (AUD) sees Slump in Growth from Lower Resource Demands
As expected, the Australian Dollar (AUD) has had an unfavourable day, falling against the Chinese Yuan (AUD/CNY), the Euro (AUD/EUR), the Pound (AUD/GBP) and the US Dollar (GBP/USD). However, the ‘Aussie’ has been trending higher against the Canadian Dollar and the New Zealand Dollar, achieving highs of 0.9630 and 1.1228 respectively. This slump in performance can be partly attributed to status of the AUD as a commodity currency, and concerns relating to the economic performance of China, one of Australia’s key export partners. A decrease in demand for Australia’s key resources (such as iron ore and coal)has meant that Australia’s policymakers ‘may need to adjust their idea of the country’s ideal growth rate’, according to Reserve Bank of Australia (RBA) Governor Glenn Stevens, speaking today in Sydney.
Reduced Dairy Demand Spells Trouble for New Zealand’s Economy and the New Zealand Dollar (NZD)
The New Zealand Dollar (NZD) has met with disappointing results today, falling across the board and losing-1.3% against the Pound. These losses come after news that the country’s dairy exports (a major industry that supports the ‘Kiwi’), have reduced in price by 60% since last year, a plummet that prompted NZ-based Fonterra, the largest dairy producer in the world, to announce that it is cutting 523 jobs in an effort to save NZ$60m (£25m) per year.
Canadian Oil Spill Adds to Doubts over Industry, Canadian Dollar (CAD) Struggling
The beleaguered ‘Loonie’ has performed poorly against all of its competitors today, largely due to the Canada’s key commodities (crude oil and gold) continuing to underperform on the global market. A 31,449 barrel leak in Alberta by Nexen Energy has put yet more pressure on an industry that is being criticised and scrutinised on a daily basis by environmentalists and investors alike. The costs of extracting oil in the Canadian wilderness are high, while the selling price of crude oil has dropped by over 50% in the past 12 months, falling below $50 at the start of the year.