Major currencies – key points this week

[John from Moneycorp]

Please see a brief summary below of the major global currencies.

 

AUD: The weak US payrolls number hit every commodity-related currency hard because, as legend has it, if America sneezes the global economy catches a cold. That has not prevented the Aussie from hitting a record high against the pound and coming close to its all-time high against the dollar but it might be a sign that an end to the one-way street is in sight.

 

USD: If President Obama and the house of representatives cannot reach agreement on the budget and the debt ceiling the United states government will run out of money on 2 August. Few believe it will come to that but the possibility makes investors nervous about the dollar. Last week's horrendously soft payrolls number is another reason for their dislike.

 

NZD: New Zealand's products are mainly meat and dairy, exports which unlikely to be compromised in any major way by the possible fall in demand for minerals and metals. In the last week the Kiwi has scored record highs against the US dollar, the euro and the pound. It might have further to go.

 

CAD: Canada's economy is closely aligned to that of the United States and to global demand for oil, of which it is a major exporter. With the US economy stuttering and the risk of a financial crisis in Europe dampening global risk-appetite the Loonie is fighting on two fronts.

 

ZAR: While the rand is vulnerable to any reduction in demand for commodities, one of its products - gold - is as popular today as it ever has been. On top of that South Africa's 5.5% benchmark interest rate comfortably outweighs its 4.6% inflation rate, a situation that no European or North American currency can match.

 

EUR: The failure of EU ministers to come up with a comprehensive and permanent solution to the Greek debt crisis is turning into a disaster for the euro. The longer they fail to sort it out, the worse investors fear the problem will become. Italy has now joined Greece, Ireland, Portugal and Spain on the list of government bonds that investors least like to own. As a result the euro has lost ground and is likely to lose more.

 

GBP: A week ago it seemed that the notion of the pound as a safe-haven currency was a busted flush. After topping the league table in the last seven days the idea seems less crazy. With nothing in the economic data to drive it forward (higher unemployment, flat retail sales), no other argument springs to mind. A safe-haven pound still sounds like a crew-member for the ship of fools but it might just float, given the shortcomings of the opposition.

[John from Moneycorp]

Hi everyone, the latest currency updates are below – thanks.

AUD: The Aussie came second in last week's league table not because of any intrinsic qualities but because it offers a 4.75% interest rate and the financial market panic of the previous fortnight had subsided. The Australian housing market still seems to be under pressure, with July bringing an -8% monthly fall in new home sales and a -15% annual drop in building permits. The Aussie did well last week but not for the right reasons.

USD: Fed Chairman Bernanke failed to announce the expected third round of quantitative easing last Friday but did not rule it out for later this month. However, few investors are in any doubt that the authorities would be content to see the dollar weaken further, QE or not QE. The US economy grew more quickly than Britain and Euroland in the second quarter but not by much. Economists argue that it is unreasonably cheap; that does not mean it will go up in the immediate future.

NZD: From zero to hero the NZ dollar leapt from the bottom of the pile to the top last week. It was all to do with the passing of the two-week panic and a revitalisation of investors' appetite for risk. It helped the Kiwi that New Zealand's trade surplus widened unexpectedly and that building permits leapt by 13% in July while in Australia they went down.

CAD: The Loonie might have done better had it not been held back by the US dollar, which spent the week waiting for the possible announcement of another round of quantitative easing ("printing money") by America's Federal Reserve. Although there was no such announcement last week there could be one within a month. If America starts printing money again it will not sit comfortable with the Canadian dollar.

EUR: August gave some respite to the beleaguered euro. Not only was everyone on holiday, the financial market panic in the middle of the month was a distraction from the lack of cohesion in Brussels. The southern Europe debt crisis is still there and without the intervention of the European Central Bank in the last month it might have been a different story. As we move into September, expect thing to worm up again.

GBP: Ridiculous though the notion may be, it is still possible that investors are treating the pound as a safe-haven currency. In the last week it was one of four tail-enders, along with the yen, the US dollar and the Swiss franc, while the antipodean dollars and the South African rand led the field. Improved investor confidence and a weaker pound, when the data provided no excuse for its punishment, make at least a modest case for its preferment.

[John from Moneycorp]

Hi everyone, the latest updates are below – thanks.

 

AUD: The Australian dollar was playing the triple-A credit rating card last week, not the commodity card. The currency is not big enough to mix it with the big boys, so could not keep pace with the US dollar or the yen, but it gave sterling a run for its money. It did so despite a further slowdown in the construction sector and a poor employment figure; employment went down by ten thousand in August when it should have risen by that number.

 

USD: A growing suspicion among investors that Greece would be allowed to default led to an increase in the pace of the exodus from the euro last week. Contributory factors included the resignation of Jürgen Stark from the European Central Bank Executive Board and noises from Berlin suggesting that Chancellor Merkel was preparing the country's banks for a default by Greece. Although default is not yet a done deal, the clouds over Athens are getting darker.

 

NZD: As investors fled from the wobbling euro some of their money found its way into the NZ dollar but only sufficient to keep the Kiwi one rank ahead of what remains, for the moment, the single European currency. The few NZ ecostats did the dollar no favours. Construction was a particular disappointment, with activity in the sector during the second quarter at less than half the level of the same period three years ago.

 

CAD: Even though the Loonie could not keep up with the US dollar it did benefit from a general desire among investors to get as far away as possible from the euro zone. It helped its case with an unexpected 12-point improvement in the Ivey purchasing managers' index and a healthy 6.3% monthly rise in building permits while managing to dodge the disappointing loss of 5,500 Canadian jobs in August

 

EUR: The talk on the street is no longer about what the EU will do about the southern debt problem. Now it is about whether Greece will default this week or next. There are growing signs that Germany is preparing to bail out of the bailout, not least the resignation of Germany's last remaining ECB executive board member, Jürgen Stark. Nobody knows what will happen in Greece does default but they know it will be ugly.

 

GBP: The failure of the Bank of England to roll out another round of quantitative easing on Thursday sparked a relief rally for the pound. Sterling was left behind by the North American dollars and the yen but made the most of its AAA credit credentials in another week during which risk was more important than return. The few UK economic data were second-division indicators and had minimal impact on the currency.

[John from Moneycorp]

Hi everyone, please see the latest updates below – thanks.

AUD: Nervousness about global growth hurt all three of the commodity-oriented dollars and the Aussie was fortunate to take the least damaging blows. It even managed to outperform the benighted euro, though not through any intrinsic economic qualities. A 1.1% monthly increase for new home sales did little to offset the -16.2% fall in the preceding three months. More worrying was a further decline in the AiG manufacturing index, which showed a worsening slowdown in activity.

USD: The US dollar missed out on another win-win week but it, alongside the Swiss franc, was not far behind sterling. The main handicap for the dollar was the expectation of a positive outcome when the German parliament voted on the country's support for the second bailout of Greece. After that vote went through as expected investors were left with nothing to look forward to and they drifted back towards the US currency.

NZD: As well as the negative sentiment surrounding the world economy, New Zealand also had to cope with a downgrade of its credit rating from AA+ to AA by two of the big three agencies. The unwelcome news added to the downward pressure on the Kiwi. It is now more than -8% of its early-August high against sterling and a further retreat is easy enough to imagine if current technical obstacles can be overcome.

CAD: Among the trio of "commodity" dollars it was the Loonie that fared least well, although it was not far behind the NZ dollar and the Japanese yen. There was no compelling reason for its underperformance other than a vague sense that the Bank of Canada might be inclined to lower its benchmark interest rate when the policy committee meets in three weeks' time. Nevertheless, it lost -1.7% to the pound and a significant -5.1% to the US dollar.

EUR: The good news for the euro was the German Bundestag's vote to support the second Greek bailout. The bad news came two days later with an announcement that Greece would miss its target of reducing its budget deficit to 6.5% of GDP next year. In theory that means Greece will not be allowed to receive any more bailout money. In practise it just means that EU leaders will have to come up with a plausible reason why that will not happen. Either way, it is not a positive development for the euro.

GBP: Sterling had a good week. Mixed news on UK house prices was offset by the highest monthly number of mortgage approvals since January last year. Gfk's index of consumer confidence showed a small but welcome and unexpected improvement to a still-negative -30 in September. Despite the media clamour, analysts do not expect the Bank of England to reactivate its asset purchase "money printing" at this week's policy meeting.

[John from Moneycorp]

Hi all - the latest currency update is below - thanks.

 

AUD: The commodity- and energy-related currencies were at the upper end of the scale for the same reason the US dollar was close to the bottom. The prospect of a resolution to the European debt crisis created a more upbeat market view, dispelling - at least for the moment - the prospect of a Euroland blow-up and a global recession. If recovery looks more assured, China will want more of Australia's ore and coal exports.

 

GBP: The pound kept company with the safe-haven dollar, yen and franc not because of its AAA credit rating but because investors suspected the Bank of England might embark on another round of quantitative easing. Sure enough, on Thursday the Bank did exactly that, announcing another £75bn of asset sales. The news was temporarily bad for the pound but seemed to have done no long-lasting damage.

 

NZD: Rugby-related beer sales are contributing to the NZ economy but the world cup has also displaced some of the usual economic activity. The effect of the Canterbury earthquake has at last become positive though. The rebuilding effort has driven business optimism in the area to the highest level in the whole country. On a broader front, business sentiment was muted in the three months to September although firms seemed to be more worried about the general outlook than they were about their own particular business.

 

USD: Upbeat sentiment among investors carried through the weekend, spoiling their appetite for the safe-haven US dollar and Japanese yen, which were the week's worst performers. A stronger than expected US employment report was also, perversely, negative for the Greenback. The argument there was that a stronger US economy points to a stronger world economy. That meant less reason to stock up with low-risk assets such as the dollar.

 

EUR: It was an above-average week for agreements to solve the southern European debt crisis. Two of them emerged; one between EU finance ministers to continue lending money to Greece and one between President Sarkozy and Chancellor Merkel to recapitalise European banks. No details were revealed, of course, but this time investors think they might really be serious about solving the problem. The European Central Bank helped things along with a promise to lend unlimited amounts of money to Euroland commercial banks.

 

CAD: Improved investor optimism was as helpful to the Loonie as it was to the antipodean dollars. A steep -10.4% monthly fall in Canadian building permits was only a temporary hindrance. Otherwise the economic data were robust. The Ivey purchasing managers' index bucked the global downward trend with a six-point improvement to 63.4 in September. There was good news on the employment front too. A net 60.9k jobs were created in September, three time as many as expected.

[John from Moneycorp]

Hi everyone – please find the latest currency updates below – thanks.

 

AUD: There was a similar feeling of déjà-vu among the "commodity" dollars. Fewer worries meant a greater appetite for the currencies of commodity exporters, especially for those offering an above-average rate of interest. Australia further improved the AUD's position with stronger than expected employment data, including a fall in the rate of unemployment to 5.2%. The overall effect put the Aussie in top place for the week.

 

GBP: Sterling spent another week in the company of those more famously safe-haven currencies, the US dollar and the yen. The pound dodged the potentially damaging effects of a 15-year high for unemployment but remained in the shadow of the euro. Although grouped at the bottom of the league with the USD and JPY, sterling outperformed both, pulled ahead in the euro's slipstream.

 

EUR: Europhoria supported the currency for another week. Investors' optimism paid off when it was confirmed that EU leaders will announce a full and final solution to the Euroland debt problem this coming weekend. Although only a broad-brush plan is expected, investors are confident that it will lead to concrete results. As long as that confidence survives the euro will remain buoyant.

 

USD: It was exactly the same story last week as it had been during the previous seven days. The European Union was preparing a real, concrete, workable plan to sort out its debt crisis, removing a major cause of concern for the global economy. That worry having been removed, investors did not feel the need for safety offered by the US dollar and the yen. For a second week the two safe-haven currencies wore the worst performers

 

NZD: The Kiwi was close to the top of the table, also driven mainly by renewed optimism about Euroland, but could not keep pace with the Aussie. Not only were there no convenient and helpfully strong statistics from the New Zealand economy, New Zealand's 2.5% benchmark interest rate looks anaemic alongside Australia's 4.75% equivalent. The NZ dollar did not do badly; it just fared less well.

 

CAD: Of the Commonwealth trio the Loonie came third. Perhaps it was held back by its 1% benchmark interest rate - the lowest of the bunch. Maybe it was the shortage of positive economic data. Either way, the Canadian dollar could not attract as much support as its South Pacific cousins. Canadian economic data were decent enough but not sufficiently so to generate upward traction.

[John from Moneycorp]

The Australian dollar has strengthened after it was reported in the Guardian newspaper that France and Germany were ready to boost the eurozone's rescue fund in a bid to address the public debt crisis.

 

The markets are very fragile currently, therefore any news is having an impact on currencies – in this case, the suggestion of a solution to the debt crisis sparked interest in the Australian dollar (making it strengthen).

 

Some positive data was also released which illustrated how the Australian economy will perform over the next few months – this also boosted the Aussie dollar.

[John from Moneycorp]

Hi all – please see the latest updates below – thanks.

AUD: Optimism for an EU debt solution - one which would prevent a return to negative economic growth - kept the Australian dollar afloat last week but was not strong enough to send it to the front of the class. Coming up this week are Australia's inflation data and an RBA interest rate decision. One will undoubtedly influence the other but there is no real expectation that AUD rates will head higher.

GBP: Investors reckon they know exactly where they stand with the Bank of England. Sterling interest rates are not going up. It was therefore with detachment that they greeted last week's news of 5.2% consumer price index inflation in the year to December, a level that matched the record high for the series three years ago. It was not the inflation numbers that kept sterling in the top quartile of major currencies last week, it was its unchallenged AAA credit rating.

EUR: Yet again it was the euro at the centre of attention for the entire week. There was an element of crisis fatigue to it though, with two summit meetings on the agenda; one last weekend and one this coming Wednesday. If, as analysts suspect, France bends to Germany's will it is possible - even likely - that a full and final plan to resolve southern Europe's debt crisis will be outlined this week. Any sign of a fudge, though, and the knives will be out for the euro.

NZD: It is a similar story for the NZ dollar, which pottered along in the wake of the Aussie, neither on the most-wanted list nor on the scrapheap. The RBNZ will have the opportunity on Tuesday to begin reversing the emergency interest rate cut it made in March after the Canterbury earthquake. The chances are loaded towards the central bank not seizing that chance. Preserving the economy is more important.

USD: As one of only two viable alternatives to the single European currency (the other being the Japanese yen) the US dollar depends for its success on investors' dislike of the euro. Over the last fortnight that dislike has been muted by the prospect - valid or not - of a solution to Club Med's debt problems. Expect the US dollar to remain in a holding pattern as long as there is hope that EU leaders will put aside their differences on Wednesday.

CAD: The Canadian dollar's fortunes were more closely tied to those of the US dollar last week than they were to its antipodean cousins. The core rate of inflation jumped from 1.9% to 2.2% but it is unlikely that this will be enough to persuade the Bank of Canada to increase its 1% interest rate target at this week's meeting. As above, the need to preserve the feeble economic recovery outweighs the threat of inflation in most central bankers' minds

[John from Moneycorp]

Hi everyone – please find the latest currency updates below – thanks

 

AUD: The Aussie has been all over the place in the last three months but has not gone very far. Against the pound it is unchanged from late August. It is looking twitchy though, partly because the Australian economy is looking less bomb-proof than it used to and because house prices are heading lower. Mainly, though, the Aussie slipping because investors worry what will happen if turmoil in Euroland reduces Chinese demand for Australia's coal and iron ore and for the currency itself.

 

GBP: Sterling remained in the middle of the field, keeping pace with the euro and the Swiss franc. It had to contend with a fall in the inflation rate from 5.2% to 5.0% and an increase in the unemployment rate from 8.1% to 8.3%, both traditionally signals to lighten holding of a currency. The governor of the Bank of England threw some red meat to the bears when he downgraded the forecast for economic growth and hinted there could be another tranche of asset purchases by the Bank once the current budget of £275bn has gone.

 

EUR: The appointment of unelected governments in Italy and Greece has failed to mollify investors. They might sympathise but have yet to be convinced that economists will make any better fist of sorting out those countries' debt problems than the politicians who went before. When Spain borrowed ten-year money through the sale of ten year bonds last week investors demanded a hefty 6.98% rate of interest. A year ago it would have been 4.72%. The euro needs major action from EU leaders: Instead it is being hung out to dry.

 

USD: the US dollar was the week's second-best performing currency behind the Japanese yen. The slow-motion train wreck in Euroland is giving investors ample opportunity to prepare for when something nasty happens to the euro. They are taking advantage of the opportunity by stocking up with yen and US dollars. The re-emergence of a deficit crisis in Washington might mean the loss of America's remaining two AAA credit ratings but investors seem unconcerned: triple-A or not, the Greenback is still seen as safer than the euro.

 

NZD: The New Zealand dollar was not the week's worst performer; that dubious accolade belonged to the South African rand. But it had another bad run. From its highs three months ago the Kiwi is down by 11% against the pound and by 15% against the US dollar. Like the AUD, the NZD is suffering from a lack of confidence that New Zealand's economy would come through the threatened euro zone firestorm unscathed. Investors can only guess how demand for the Kiwi would be affected but they are guessing it would not go up.

 

CAD: The Canadian dollar had more affinity with the US one than with its antipodean cousins. It was the week's third strongest performer behind the Greenback and the Japanese yen. The economic data helped its case. Canadian manufacturing sales went up by double the proportion analysts had forecast in September. The leading indicator, an amalgam of employment, building permits, stock prices and other forward-looking statistics, also came in twice as strong as expected, albeit only with a 0.2% increase instead of the forecast 0.1%.

[John from Moneycorp]

Hi everyone, please see the latest updates below – thanks.

 

AUD: An almost total lack of Australian economic data left the Aussie to wander around in the unlikely company of the Swiss franc and Japanese yen. They were accompanied by the Canadian dollar, which also had no place of its own to go. The commodity currencies received a boost early this Monday after the report that the IMF would hand over €600bn to cover Italy's refinancing needs for the next year. It was enough to turn a losing week into a winning one for the Aussie.

 

GBP: Sterling was far from successful in the week's currency lottery, sharing penultimate place with the South African rand. It did nothing wrong; the UK economic statistics were mostly in line with or better than expectations. The problem was that investors seemed more inclined to buy the euro on good news than sell it on bad. Because they were buying US dollars anyway the pound got the rough end of the stick.

 

EUR: Rumours and stories of a new and conclusive solution to the Euroland debt crisis came thick and fast: The new Spanish austerity package would make the Spartans look like Barbra Cartland; the jointly-guaranteed "eurobond" project would be revived; the IMF would lend €600bn to Italy. None turned out to be true but collectively they supported the euro. Nevertheless, investors are increasingly reluctant to lend their hard-earned to Euroland governments. They need serious action to stabilise the situation and they need it now.

 

NZD: Like the AUD, the NZD found itself in the middle of the field after a strange week in which market liquidity was drained by the US holiday and investor's appetite to get involved was hampered by their lack of conviction, especially with regard to the euro. The NZ dollar's big break came this Monday morning when Prime Minister John Key's National Party won the general election by a street. Investors think he will deliver free markets and a balanced budget.

 

CAD: The Loonie kept company with its antipodean cousins, neither shining nor sinking in mid-league. A 1.0% monthly increase for retail sales in September was twice as strong as expected and therefore positive for the currency, but it served more to nudge than to drive its direction. Had it not been for the Keys election win in New Zealand the Canadian dollar would have come through the week as the commodity currencies' leader.

 

USD: The failure of a Congressional "supercommittee" to agree on a deficit-reduction programme has not put off investors in US Treasury bills and bonds. They can live with the stalemate because they know America will always repay its debts; it can print as many dollars as it needs. The same is not true of euro zone governments, none of which has the same printing power. Greece or Italy could default; the US cannot.

[John from Moneycorp]

Hi everyone – please find the latest currency updates below, thanks.

 

AUD

:

Over the last 12 months the average daily price for

GBP

/

AUD

has been 1.5523. This morning it was trading within half a cent of that level. In other words it has gone nowhere in a year. Investors currently worry that it will go backwards in coming months as the result of widely-predicted recession in

Europe

. However, it is impossible to rule out the possibility of another year of stability.

 

NZD:

Like the Australian dollar, the NZ dollar's progress is being held back by the fear of an economic slowdown in

Europe

that could put a brake on global growth. Also like the Aussie, the Kiwi has gone almost nowhere in the last 12 months. The average daily price of 2.0253 for

GBP

/NZD is only a cent adrift from the current trading level. Whether or not nothing happens in the next 12 months either remains to be seen, it is not impossible to imagine.

 

CAD:

The Loonie has fallen by 2.5% against sterling in the last 12 months but has gone almost nowhere in the last two years. The

GBP

/CAD exchange rate has averaged 1.5901 over that period; today it was trading scarcely more than a cent away from that level at 1.6030. Although history can provide no sure guide to the future, it is possible that another 12 months of stability could be on the cards.

 

EUR:

Whilst it would be premature to brand the latest EU agreement a failure, it has failed to convince investors that a resolution to Euroland's sovereign debt crisis is at hand. The European Central Bank refuses to buy government bonds on the scale necessary to support them. Instead, it is printing money for the use of commercial banks, which can now borrow as much as they want for three years. The ECB hopes they will use it to buy government bonds but there is no guarantee they will.

 

USD:

The dollar did better than sterling over the last seven days but not by much, hardly more than half a cent. More intriguingly, and contrary to the popular perception, the net movement of sterling/dollar over the past 12 months is as close to zero as makes no difference. Both countries have a problem with over-indebtedness but both also enjoy a triple-A credit rating and have control over their own currencies. For the moment, investors are comfortable with them both as safe havens.

 

GBP

:

Sterling

was the week's third best-performing currency behind the US dollar and the yen. With euro zone countries under threat of downgrades to their credit ratings, the pound's triple-A status gives it almost safe-haven status. Its performance over the last 12 months adds weight to that notion: Compared with its level against the US dollar a year ago the pound has moved less than quarter of a cent. There is no guarantee that stability will persist but it might.

[John from Moneycorp]

Hi everyone and Happy New Year – the latest currency updates are below.

 

AUD: The "Santa rally" that often takes equity prices higher around Christmas spread to the commodity-oriented currencies this festive season. All three of the Commonwealth dollars moved ahead at roughly the same pace, buoyed by the same positive sentiment. In the case of the Australian dollar itself, the positive sentiment was helped by two indicators that pointed to further economic expansion. Most recently, the Australian dollar has strengthened. This is due to positive manufacturing data from China.

 

EUR: With Germany still refusing to write the cheque that would keep the euro intact the job has been left to the European Central Bank. In 2011 it switched on the printing presses to create hundreds of billions of euros with which to support Italian government bonds and the region's commercial banks. In a single day the ECB dished out half a trillion euros to 500 banks. And the presses are still on standby. The omens are not great.

 

USD: Together with the Japanese yen the dollar is one of two top-tier havens for nervous investors keen to put their money in a safe place. As long as the economy and creditworthiness of Euroland remain suspect, that safety feature will remain in demand. In 2011 the dollar advanced by less than a cent against sterling, principally because for the first six months of the year investors were not worried enough. That is unlikely to be the situation in the first half of this year.

 

NZD: The Kiwi kept close company with the Aussie dollar during the festive fortnight, taking advantage of a burst of year-end optimism. NZ economic statistics were few and far between and were not entirely positive. Business confidence softened in December and the economy grew by just 1.9% in the year to September, less than the 2.2% that investors had been anticipating.

 

CAD: Torn between following the US dollar and running off with its antipodean cousins the Loonie decided to opt for a two and a half cent rally in company with the AUD and NZD. The economic fundamentals had little to do with its advance; investors were smitten with festive optimism and they were of a mind to buy themselves something a little less boring for Christmas than the safe-haven Greenback and yen.

[John from Moneycorp]

Hi everyone – please find the latest currency updates below, thanks.

 

AUD: The Aussie was unchanged against sterling on the week, having remained in a narrow cent-and-a-half channel. Data from the Australian economy were adequate rather than positive, with signs of modest improvement in manufacturing, construction and services that made the picture less gloomy than before. Retail sales in November were flat in comparison with the same month last year.

 

EUR: The euro had a nervous start to the year after investors asked themselves what had changed and decided the answer was "nothing". Against the US dollar and the pound the euro scored a 15-month low; against the Japanese yen it was at its weakest in ten years. As this week began the Franco-German summit meeting provided a glimmer of hope, as such meetings generally do, but it will probably have faded by midweek.

 

USD: With the euro under the microscope once again the US dollar and Japanese yen have reasserted themselves as places of safety. The two currencies led the field last week, both strengthening by about 1% against the pound. Friday's particularly meaty US employment report helped the dollar higher: 200k jobs were added in December and unemployment was down from 8.7% to 8.5%. In a return to traditional logic, the strong US data worked in the dollar's favour, not against it.

 

NZD: Despite - or maybe because of - a dearth of New Zealand economic statistics the NZ dollar was the third best performer for a second week. There was no obvious reason why the Kiwi found favour with investors and it was the only commodity-oriented currency to pull ahead of sterling. There are no important statistics between now and Friday either, so if the "no news is good news" attitude persists the Kiwi could possibly have another good week ahead of it.

 

CAD: The Loonie was going nowhere until it tripped over a disappointing employment report on Friday afternoon. A 17.5k jobs increase in December failed to make up for the -18.6k lost the previous month and the unemployment rate went up from 7.4% to 7.5%. Although the numbers were not awful, they fell short of expectations and the news sent the Loonie to its lowest level this year.

[John from Moneycorp]

Hi everyone, please see the latest currency updates below, thanks.

 

EUR: In what looked like a re-run of the previous week the euro spent four days on the rise before falling nearly all the way back on Friday. The optimism this time came from a perception that the wholesale downgrade of Euroland credit ratings was no worse for the euro than a similar US downgrade in August had been for the dollar. Friday's pessimism came with the fear that Greece's debt restructure might fall apart.

 

USD: With investors mostly in upbeat mood they felt no need for the security offered by the US dollar and the yen. The safe-haven currencies were left on the shelf and were the week's two worst performers. US economic data were in short supply and even those that did emerge were not particularly useful as guidance. The most instructive figure this week will be the first peek at fourth quarter gross domestic product, which is forecast to have grown by an annualised 3.0%.

 

AUD: The Aussie kept close company with the NZ dollar, the euro and the Swiss franc. It did not have much to say for itself and was fortunate not to be punished for some disappointing employment data. While the 5.2% unemployment rate was unchanged, 29,300 jobs were lost in December and the November job loss count was revised upwards to 7,500. The news had only a temporarily negative effect on the Australian dollar.

NZD: December's Quarterly Survey of Business Opinion had a subdued tone, showing a second successive decline in business confidence and an almost complete absence of upward pressure on prices. The collapse of inflation became clear 24 hours later with figures showing how the consumer price index fell by -0.3% in the December quarter. The negative inflation number was not helpful to the NZ dollar but did it no lasting damage.

 

CAD: The Canadian dollar was more strongly attracted to the US dollar than to its Australian and New Zealand cousins. It got no help from the Canadian economic data and one figure was a noticeable handicap. The consumer price index fell by -0.6% in December. It was only one month's data, and inflation for the year as a whole was a positive 2.3%, but the whiff of deflation did not bring buyers flocking to the Loonie.

GBP: Concerns linger on the Bank of England potentially having to inject further cash into the fragile UK economy (this is called Quantitative easing). Fourth-quarter UK GDP data is released on Wednesday and depending on the figure, this could undermine sterling and weaken the pound.

[John from Moneycorp]

Hi all – please see the latest currency updates below, thanks.

 

EUR: The euro had a good week, helped by a belief among investors that negotiations about reducing Greece's government debt would be successful. On the other side of the coin were two developments at the weekend: President Sarkozy announced a new tax on French financial transactions and Berlin let it be known that the chancellor would like Brussels to take control of the Greek budget. Investors will hold their fire until they see what - if anything - comes out of this Monday's EU summit meeting in Brussels.

 

USD: The dollar ended up at the bottom of the heap through no fault of its own. With confidence about a Greek debt resolution relatively high, demand for the safe-haven dollar was low. Figures on Friday showing that the US economy grew by 0.7% in the last quarter of 2011 did the dollar no good whatsoever. It simply reinforced investor optimism about the global economy, further dampening any demand for safety.

 

AUD: Although it did touch an all-time high against the pound, the Aussie was held back by unhelpful statistics. Two economics research departments released figures pointing to a slowing Australian economy and inflation figures for the fourth quarter of last year revealed that prices did not rise at all. Inflation for the year as a whole fell from 3.5% to 3.1%. The numbers were not horrible but they could have been far better.

 

NZD: Where the Australian data failed to deliver, those from New Zealand exceeded expectations. Credit card spending was up, the survey of purchasing managers showed activity on the rise again and November's trade deficit was turned into a NZ$338 surplus in December. Few though they were, the New Zealand data were the only ones to exceed expectations in every respect last week.

 

CAD: The performance of the Canadian dollar closely matched that of the pound, though only by coincidence. Canadian economic data were few and did not get in the way; the leading index, an indicator of future likely economic performance, was stronger than expected and retail sales rose by 0.3% in November in line with forecast. In background support was investors' perception that Greece will be successful in reducing its government debt, thereby i

[John from Moneycorp]

Hi all – please see the latest currency updates below, thanks.

AUD: The Australian and New Zealand dollars both did well over the week. The Aussie was fortunate to dodge some ropey economic statistics, particularly those from the housing market. New home sales, building permits and house prices all registered monthly declines. Not all the news was mediocre though. Surveys of the manufacturing and services sectors did both produce positive results.

NZD: As the New Zealand economy had almost nothing to say for itself thee Kiwi dollar was left to bob along in the wake of the AUD and did a good job of keeping up. The commodity currencies collectively had a good week, helped by strong US economic data that persuaded investors that demand for commodities would remain strong. The 243k monthly rise in US non-farm payrolls was particularly helpful in that direction.

CAD: The Canadian dollar made no attempt to shine. The economy shrank slightly in November after stagnating the previous month. The industrial product price index and the raw material price index both went down in December. Canadian unemployment went up to 7.6% in January after only 3.3k new jobs were created. But the Loonie was helped higher by the same US employment numbers that boosted the other commodity-oriented currencies.

EUR: There is still no resolution of the plan to reschedule Greek government debt and there is a new disagreement, at cabinet level, about the reforms and cuts demanded by the EU before Greece gets its next instalment of bailout money. Even so, investors still have faith that both those issues will be sorted out satisfactorily this week. If they are it will be good for the euro. Otherwise it could find itself in the firing line again.

USD: A robust series of US economic data kept the dollar ahead of the euro but did it no great favours. A prime example was Friday's employment report, which showed the creation of twice the number of jobs that analysts had been expecting. Investors did not know whether to sell the dollar, on the basis that stronger growth means less demand for safe-haven currencies, or to take the obvious line and buy it. So they did both and the dollar went nowhere.

[John from Moneycorp]

Hi everyone, the latest currency updates are below – thanks.

 

AUD: A -0.1% fall in Australian retail sales and further slippage in the construction sector did little damage to the Aussie. It got a boost when the Reserve Bank of Australia failed to lower its benchmark interest rate, surprising investors and sparking a sharp but short-lived upward spike. Otherwise, a general lack of inspiration allowed the AUD to keep pace with sterling and the two were unchanged on the week.

 

EUR: The euro was the week's second-best performer among the major currencies. It found favour after investors began to expect agreement between Greece and EU ministers, on the scale and speed of spending cuts and reforms, which would lead to another €130 billion of bailout money for Athens. It is not a done deal yet though. Greece has until Wednesday to persuade the EU that it is serious, and that today's commitment to austerity will not evaporate after elections in April. The euro has more work to do.

 

USD: The dollar was unchanged against sterling on the week. There were vanishingly few economic statistics to give it direction and those which might have done so had minimal impact. The only figure really to matter was an unexpected two and a half point fall for the Michigan university index of consumer sentiment. The dollar's safe-haven qualities were not in demand but investors were not inclined to sell it either.

 

NZD: Like the Australian dollar, the Kiwi never really got going. It added about half a cent against sterling but only by an accident of timing. Figures from the NZ economy showed the number of people in employment rising by 0.1% in the fourth quarter of last year. That incremental rise was enough to lower the rate of unemployment from 6.6% to 6.3%, suggesting a fall in the size of the workforce.

 

CAD: The Loonie kept pace with the US dollar, sticking within a half-cent range either side of one-for-one. Against sterling it added about three quarters of a cent. The Canadian economy had little to say for itself. A two-point rise in the Ivey purchasing managers' index showed activity picking up and December's $2.7 billion trade surplus was a positive surprise.

 

[John from Moneycorp]

Hi everyone – please see the latest updates below, thanks.

 

AUD: A triple-A credit rating, a 4.25% benchmark interest rate and an impressively low ratio of government debt/GDP Australia continues to attract bond investors. On top of that, the Reserve Bank reminded them that the resource boom will suck in over A$100bn of inward investment in the next two years. Close to record highs it is hard to argue for further strengthening of the Aussie but that does not mean it cannot happen.

 

EUR: The euro began the week with investors suspecting that Germany was aiming to force Greece out of the single currency. It ended it with the real prospect that a meeting of EU finance ministers this Monday could result in the release of money for the second bailout. Neither possibility engendered any real emotion from investors, who appear worn down by the endless saga. Nevertheless, agreement on the bailout this week - if it happens, ought to be positive for the euro.

 

USD: The fate of the dollar remains inextricably bound to the confidence of investors. When they are upbeat they buy commodities and equities and sell the safe-haven US dollar; when they are worried - usually about Greece and the global economy - they sell riskier investments and buy the dollar. Last week the mood was mainly positive and the dollar suffered. Also holding it down was the Federal Reserve chairman's pledge to keep interest rates low for a long time to come.

 

CAD: With America's economy creeping - if not striding - ahead and global commodity prices remaining buoyant the Canadian dollar looks attractive to investors. Since the beginning of the month the Loonie has been doing its best to establish itself at or above one-for-one with the US dollar. However, it is still having to play third fiddle to the Brazilian real and the Mexican peso, which have been the world's best-performing currencies this year,

 

NZD: The New Zealand dollar is unchanged on the week against sterling, supported by offshore buying, most notably by Japanese investors who have pushed the NZD/JPY exchange within a cent of last year's high. Although the latest dairy auctions were slightly disappointing, implying lower payments for the agricultural sector, the Reserve Bank governor remains optimistic that demand from China will remain strong. He is probably less enthusiastic about the strength that implies for the NZ dollar.

[John from Moneycorp]

Hi everyone, the latest currency updates are below – thanks.

AUD: As usual the antipodean commodity dollars stuck together, this time joined by the Canadian dollar. All three fell back by around -0.8% against the pound. The economic data failed to come to the Aussie's rescue, even though they were not at all bad. The Conference Board's leading index (which aggregates forward-looking statistics to anticipate growth) and an equivalent leading index from Westpac both swung from negative to positive, implying future economic expansion. The wage price index was steady in the fourth quarter of 2011 with growth at an annual 3.6%.

EUR: The G20 meeting threw up no volunteers to boost the Euroland bailout fund. The attitude of non-EU leaders was that euro area countries must first help themselves. A summit meeting later this week will address the issue; German enthusiasm has already been registered as minimal. Investors are less fussed about the bailout fund than they are about the European Central Bank's second Long Term Refinancing Operation on Wednesday, which will probably dish out another half trillion of cheap loans to the region's banks. They like the idea.

USD: The dollar and the pound were unchanged against each other on the week. Neither was in the limelight as the yen suffered another trashing and the euro enjoyed a brief renaissance. In common with most countries, US economic data were in short supply, neither helping nor hindering the dollar. Existing home sales rebounded strongly in January while new home sales went into reverse. Weekly jobless claims were steady.

CAD: For some reason the Loonie aligned itself to its antipodean cousins instead of the US dollar. All three fell back by around -0.8% against the pound. The few Canadian economic data showed wholesale sales rising by a robust 0.9% in December while retail sales for the same month went down. The -0.2% retail sales decline made it look as though retailers had stocked up with goods they found themselves unable to shift.

NZD: Once again the antipodean commodity dollars moved together, this time joined by the Canadian dollar. All three fell back by around -0.8% against the pound. Just two NZ statistics were provided to motivate investors. Neither was much of an incentive. The latest survey of inflation expectations found consumers guessing price would rise by 2.5% this year where previously they had put the estimate at 2.8%. Annual growth in credit card spending halved in January to 3.1% (in the year to December it grew by 5.9%).

[John from Moneycorp]

Hi everyone – please see the latest currency updates below, thanks.

 

AUD: Having taken the Australian dollar to an all-time high in mid-February, investors have become less gung-ho in their buying. At least in part that will be in recognition that the Aussie has strengthened by 68% against the pound since Northern Rock tipped sterling off its perch in September 2007. Last week the Aussie did manager to strengthen against the pound but enthusiasm was lacking and its gain amounted to no more than a single cent.

 

EUR: Although much of the heat has gone out of the Euroland debt crisis, with the second bailout for Greece and the European Central Bank's trillion-euro loan to the region's commercial banks, there are still nagging concerns. Why, for instance, did 800 banks line up for last week's special loans when only 500 took part in the first round two months ago? As long as the questions keep coming the euro will be kept on the back foot.

 

USD: Another respectable set of US data reinforced the notion that America's economy is the best of a bad bunch. The nine-point jump in consumer confidence to 70.8 was particularly impressive. Yet the dollar was able to add no more than half a cent to its value against sterling. Investors see stronger US economic performance not as a reason to buy the dollar but as reassurance that the global economy has a brighter future. It makes them less inclined to buy the safe-haven currency, not more so.

 

CAD: The Loonie was the week's best-performing currency, for no obvious reason. A wider than expected trade deficit and economic growth at half the pace of the United States should have sent the Canadian dollar lower, not higher. Yet it sprang ahead after breaking through a four-month high against the US dollar. It was falling back as London opened this Monday, suggesting that speculators were taking profits on long positions.

 

NZD: Close to the all-time high they set for it last August, investors are treating the Kiwi with more caution. Since the middle of January, and with the exception of an exploratory spike three weeks ago, the New Zealand dollar has gone nowhere. Last week it eased by a cent against the pound. Another downward pressure is a slowing of Chinese economic growth. The implication is that Chinese demand for New Zealand's exports could also slacken, thereby reducing the upward pressure on the NZ dollar.

[jtct]

What about the GBP ?

[John from Moneycorp]

Over the past week, there has not been any notable data for GBP which has affected the exchange rates.

In their economic forecast, the British Chambers of Commerce said the UK will avoid a double-dip recession – also, that growth in 2012 will be slower than previously forecast.

The main focus this week is the Bank of England policy decision on Thursday which will decide on any changes to the quantitative easing target or to interest rates.

[John from Moneycorp]

Hi all – the latest currency updates are below, thanks.

 

EUR: The euro spent last week in the middle of the major currency field, despite the anticipation - and then the realisation - of a national default by Greece. After two years in which to accustom themselves to the event, it went through smoothly and scarcely an eyebrow was raised. With the Greek problem out of the way for now, the euro ought to be able to look forward to a period of contemplative calm. The crisis is not over but, for the moment, it is not the foremost of investors' considerations.

 

USD: Another monthly rise in US non-farm payrolls, the 17th in succession, took to 2.8m the number of jobs that have so far been restored after 8.6m disappeared in 2008-09. The United States is leading the western world back towards recovery. Unusually, the strong employment figures were not seen as a signal to sell the dollar, as has so often been the case in recent years. This time, perhaps because Greece was busy defaulting on its debts at the time, investors took the traditional view and bought dollars.

 

CAD: Shortly before strong US employment data came out on Friday afternoon Canada released its own positive figures, with a fall in unemployment from 7.6% to 7.4%. It was not the only helpful statistic. Earlier in the week the Ivey purchasing managers' index rose by ten points to 66.0 The index measures activity and orders across a broad spectrum of business and its 18.5% rise was a biggish deal. Taken together the US and Canadian data made North America and its two dollars look good.

 

AUD: The Aussie was one of the week's two worst performers, partly because of underlying nervousness about Greece but also because of the Australian economic evidence. The current account deficit widened, construction sector activity slowed further, economic growth slowed in the fourth quarter of last year and unemployment went up to 5.2% in February with the unexpected loss of 15.4k jobs. Good news was in short supply.

 

NZD: The Kiwi fell behind the pound but only to the tune of a cent and a half. In the early part of the week it was held back by uncertainty surrounding the planned Greek default. On Friday it lost ground when investors - unusually - decided that evidence of stronger US economic performance was not a reason to buy the currencies of commodity exporters. And all along, it was weighed down by the Aussie dollar, which was suffering from a series of below-par Australian economic data.

 

UK: The Monetary Policy Committee (MPC) voted and kept interest rates at 0.5% in March – given the economic outlook in the UK, it is likely that rates will stay as they are for a while yet. In other data released, service sector continues to grow however the stats for UK industrial production were lower than expected.

[John from Moneycorp]

Hi everyone – please find the latest currency updates below, thanks.

 

AUD: Had it not been for even worse performance by the South African rand the Aussie would have been at the bottom of the table. Re-emerging worries about the health of the global economy adversely affected all the commodity-oriented currencies. Purchasing managers' indices from China and Euroland all came in below the 50 mark, indicating falling activity. The Chinese numbers were especially hurtful; if growth there slows, Australia's exports and its currency will be in less demand.

 

NZD: As well as the general downward pressure on commodity-related currencies, the NZ dollar had issues of its own. The figures for fourth quarter gross domestic product were a disappointment. Over the three-month period the NZ economy expanded by 0.3%; not a particularly bad result except that investors had been primed to expect twice that much growth. The annual figure also fell short, coming in at 1.8% instead of the predicted 2.2%.

 

CAD: The Canadian dollar lost less ground to the pound than the antipodean commodity currencies but was not able entirely to hide behind the Greenback. Wholesale and retail sales rained on the Loonie's parade, the first with a -1.0% fall when business should have been up by 0.6%, the second after a monthly 0.5% increase which ought to have been 1.7%. Had it not been for strong auto sales the figure would have been even worse at -0.5%.

 

EUR: The euro was the week's second best performer, pipped to the post only by its constant companion, the Swiss franc. The source of its success was a successful bond issue in which the European Financial Stability Facility raised €1.5bn to boost its fighting fund. Investors were impressed to discover that there were bids for more than three times the amount of stock on offer. It improved their attitude to the euro immeasurably.

 

USD: There was nothing to choose between the dollar and the pound, which opened this Monday almost unchanged against one another on the week. Most of the (few) US economic statistics related to the residential property market and they told a mixed story. The NAHB barometer of builders' activity was static at a weak 28%. Building starts and housing permits were on target. New and existing home sales were disappointing, down by -1.6% and -0.9% when both had been expected to rise.

[John from Moneycorp]

Hi all – please see the latest currency updates below, thanks.

 

AUD: The Aussie dollar was the week's joint worst performer. It lost two cents against sterling to leave it nearly 6% below February's record high. The manufacturing sector reported slowing activity and building permits were down by -15.2% in the year to February, reinforcing the sensation of weakness in the property market. Like the New Zealand dollar, the Aussie suffered from a belief that the domestic economy in China is struggling. If Chinese consumers don't consume, there will be less demand for Australia's exports.

 

NZD: The week's two NZ economic statistics made little difference to the value of the currency. Business confidence improved by six points to 33.8 and building permits were down by -6.7% in February. Like the Australian dollar (although to a lesser extent), the Kiwi suffered from a belief that the domestic economy in China is struggling. If Chinese consumers don't consume, there will be less demand for New Zealand's exports.

 

CAD: The Loonie spent most of its time slightly above one-for-one with the Greenback. It stayed out of the limelight with only a couple of statistics to show how the Canadian economy is doing. Manufacturers' costs fell by -0.5% in February while factory gate prices rose by 0.2%. The implication is positive for the Canadian dollar, in that manufacturers feel able to raise prices even though their costs are not going up. This week's Canadian and US employment numbers will both be important for the Loonie.

 

EUR: The economic story from Euroland was less than inspiring. Eurostat's assessments of industrial and economic confidence for the euro area as a whole were either unchanged or lower in March while German retail sales headed lower for a fourth consecutive month. Although EU finance ministers agreed to pump another €500bn into the bailout fund investors remained largely unimpressed because there is still not enough cash in the kitty to handle a major problem in Spain or Italy.

 

USD: Whilst the US economic data were not outstanding it was something else that tipped the dollar out of bed. The Federal Reserve chairman put the cat among the pigeons when he suggested that more quantitative easing - printing money - might be needed to get economic growth back up to normal levels. That, together with a repetition of his commitment to keep interest rates close to zero for another two years, sent the dollar to its weakest level against sterling in more than four months.