Daily Currency Update

Pound Sterling

The Pound rallied to a one-month high against the Euro on Monday, climbing above the 1.38 level, in response to comments issued by Bank of England (BoE) Deputy Governor Jon Cunliffe. Last week the central bank's chief economist asserted that interest rates are as likely to fall as rise but Cunliffe disputed this, arguing that the UK economy is 'pretty strong' and that the next adjustment to borrowing costs would be an increase. While Sterling largely held gains against the Euro on Monday, the currency's performance against the US Dollar was less impressive and the GBP/USD exchange rate fell below the 1.55 level ahead of the release of UK public finance figures.


The week started badly for the Euro, with the common currency registering declines against a number of counterparts as a result of speculation surrounding the likelihood of the European Central Bank (ECB) expanding stimulus. Germany's Producer Price Index also came in lower-than-forecast on both the month and year. Today's Eurozone Consumer Confidence index is expected to show a decline in sentiment and if that proves to be the case the Euro could register additional losses against peers like the Pound and US Dollar.

US Dollar

With markets recovering from the Federal Open Market Committee's (FOMC) interest rate decision, the US Dollar stabilised on Monday. Risk aversion, as a result of concerns relating to the economic slowdown in China, also lent the safe-haven asset support. The US Dollar was little changed after US Existing Home Sales fell by -4.8% on the month in August rather than the -1.6% forecast by economists and the currency staged a modest rally after a Fed official put forward the case for an interest rate increase taking place in 2015.

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Australian Dollar

After slipping at the start of the week in a risk-off environment, the Australian Dollar edged higher against rivals like the Pound and Euro on Tuesday. Australia's House Price Index printed at 9.8% year-on-year in the second quarter and 4.7% quarter-on-quarter. Both results were better-than-projected. The ANZ Roy Morgan Weekly Consumer Confidence Index also came in at 114.5 in the week ending September 20th, up from 105.3. Meanwhile, China's Conference Board Leading Economic Index advanced from a negatively revised 331.1 to 334.4. However, concerns that the Australian economy is 'toast' limited the 'Aussie's gains.

New Zealand Dollar

FX Update TuesdaySliding domestic consumer confidence, risk-averse trading and the threat of contagion from Australia all weighed on the New Zealand Dollar at the start of the week. The 'Kiwi' came under additional pressure after Federal Reserve official Dennis Lockhart promoted a 2015 interest rate increase. Given how sparse New Zealand's economic calendar is looking this week, 'Kiwi' fluctuations are likely to be the result of global economic developments and commodity price shifts.

Canadian Dollar

The Canadian Dollar experienced only modest fluctuations on Monday, registering slight gains against the Pound due to an uptick in oil prices before rescinding its advance later in the session. Canada's Wholesale Sales report printed at 0.0% on the month in July, defying forecasts for a 0.8% result. 'Loonie' volatility may be limited ahead of Canada's Retail Sales data, due for publication tomorrow.

South African Rand

The Rand dropped from a three-week high against the US Dollar on Monday and extended losses after the Fed's Lockhart kept hopes of a 2015 interest rate increase alive. As trading progressed on Tuesday the Rand was trending in a narrow range against both the Pound and US Dollar.

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