Pound Sterling (GBP) Exchange Rate Recoups Losses on Production Gains
After sliding at the beginning of the week as a result of a less-than-impressive Services PMI for the UK, the Pound rallied against peers like the US Dollar and Euro on Wednesday thanks to upbeat Manufacturing and Industrial Production reports. Both gauges increased by more-than-forecast on a monthly basis, although the annual manufacturing number did fall short. Demand for Sterling also rose as the International Monetary Fund (IMF) issued positive commentary on the status of the UK economy. Over the rest of the week Pound movement is most likely to occur following the publication of minutes from the Bank of England's (BoE) Thursday policy meeting. Minutes which show a split vote on the timeline for increasing borrowing costs would be Pound supportive. However, a dovish stance from policymakers would weigh on the currency before the weekend.
Euro (EUR) Exchange Rate Dipping on Mixed Eurozone Data
The common currency started the week strongly, with last week's poor US employment report driving the US Dollar lower and, as a by-product, pushing the Euro higher. However, several days of varying ecostats for the currency bloc took a toll on the asset and the Euro faltered on Wednesday after German Industrial Production flopped. With the situation in Greece a lot more stable than it was in the summer, the European Central Bank's (ECB) policy outlook is now the main driving force of Euro movement. If the minutes from the most recent gathering (due out on Thursday) show that the ECB is on the verge of expanding easing, we may see the Euro give up recent gains. Conversely, hints that the central bank plans to leave policy unchanged for the foreseeable future would be Euro-supportive.
US Dollar (USD) Conversion Rate Lower after NFP Disappointment
After the highly influential US Non-Farm Payrolls report disappointed on all fronts, the US Dollar declined against a number of its rivals. With the lacklustre data denting optimism regarding a 2015 interest rate adjustment, the 'Greenback' largely held declines as the week continued. If the Fed does refrain from altering borrowing costs in October, as is now expected to be the case, 'Cable' could extend gains. US data to be aware of this week includes the publication of minutes from the Federal Open Market Committee's (FOMC) recent policy meeting, US initial jobless/continuing claims figures and wholesale inventories data.
Australian Dollar (AUD) Exchange Rate Boosted by Rate Speculation
With the dud US jobs data pushing back Federal Reserve interest rate hike expectations, higher-risk and commodity-driven currencies like the Australian Dollar gained at the start of the week. The 'Aussie' extended its advance after the Trans-Pacific Partnership Trade agreement was reached and the Reserve Bank of Australia (RBA) delivered its latest interest rate announcement. The central bank left rates on hold and in its accompanying meeting minutes it was hinted that the RBA has no further cuts to borrowing costs planned. Rising commodity prices also bolstered the South Pacific currency and helped it fend off the impact of declining domestic Construction and Services Purchasing Managers Indexes.
New Zealand Dollar (NZD) Exchange Rate Bullish as Dairy Prices Rise
The New Zealand Dollar, like its Australian counterpart, benefited from the TPP trade deal, disappointing US NFP report and increase in commodity prices this week. Another uptick in dairy prices was responsible for the lion's share of the 'Kiwi's gains today and the currency experienced little reaction to a sharp drop in the NZIER Business Opinion Survey for the third quarter. Further 'Kiwi' movement could occur later this week as New Zealand's Card Spending numbers are published.
Canadian Dollar (CAD) Stronger on Rising Oil Prices
The prospect of the Trans-Pacific Partnership agreement supporting Canada's economic outlook gave the 'Loonie' a lift this week, with a 5% increase in the price of crude oil supplying the currency with another boost. So far this week Canadian data has disappointed expectations, with the nation's Ivey Purchasing Managers index showing a decline and national building permits falling by -3.7% rather than rising the 0.3% expected. Should the week's remaining reports, including Friday's employment figures, also fall short, the Canadian Dollar could easily run out of steam before the weekend.