Weekly Currency Roundup - Sterling affected by poor retail sales data

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Pound Sterling – With UK markets closed for a national holiday it was a slow start to the week for the Pound.

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Although Sterling went on to weaken against the US Dollar as UK retail sales dropped to a 16-month low, it was able to recoup losses as separate reports showed a surge in British house prices and business sentiment. The Pound began the week trading in the region of 1.5237 against the US Dollar and ends the week trading in the region of 1.5191

US Dollar

Speculation surrounding the likelihood of the Federal Reserve reigning in easing before the end of the year made the US Dollar bullish for the first half of the week. The American currency strengthened against the majority of its most traded peers until Thursday, when US GDP data came in below initial estimates and the US Dollar plummeted to a three-week low against the Euro. Over the course of Friday less-than-impressive news from the Eurozone led to a bout of risk aversion and the ‘Greenback’ staged a rebound – although it continued to trade lower against a broadly stronger Yen. The US Dollar began the week trading against the Japanese Yen in the region of 102.4507 and ends the week trading in the region of 100.4100

The Euro

Over the course of the week the Euro strengthened against its peers, despite German joblessness increasing by more than anticipated on Tuesday. Gains were extended as Consumer/Economic/Services and Industrial Confidence figures for the Eurozone all met economist’s estimates for improvement and the US economy was shown to have expanded by slightly less than expected in the first quarter. However, the common currency’s advance was hampered on Friday as German retail sales data showed an unexpected month-on-month decline of 0.4 per cent and unemployment in the Eurozone hit a new record high of 12.2 per cent. The Euro began the week trading in the region of 1.2891 against the US Dollar and ends the week trading in the region of 1.2993

Australian Dollar

This week, with speculation regarding the likelihood of the Fed tapering QE beginning to mount, the Australian Dollar sank to its lowest level against the US Dollar since October 2011 and hit a four-year low against its New Zealand counterpart. The currency was adversely affected as the IMF slashed its growth projections for China and, despite Australian building approvals increasing by more than anticipated, the ‘Aussie’ is poised for its most significant monthly decline against the ‘Greenback’ for over two years.  The Australian Dollar began the week trading against the US Dollar in the region of 0.9631 and closes the week trading in the region of 0.9595

New Zealand Dollar

With positive US data upping the odds of the Federal Reserve bringing its present level of easing to an end before the close of 2013, the US Dollar turned bullish and the ‘Kiwi’ fell against its American rival. As the week progressed RBNZ Governor Graeme Wheeler asserted that the New Zealand Dollar was overvalued, and intimated that the central bank is ready to take action to lower the currency’s exchange rate. Consequently, the ‘Kiwi’ dipped against several of its most traded peers, despite gains in domestic business confidence and activity outlook. The New Zealand Dollar began the week trading in the region of 0.8112 and ended the week trading in the region of 0.7996

Canadian Dollar

Ahead of Mark Carney’s last policy meeting as Governor of the Bank of Canada the Canadian Dollar fluctuated against its main peers. As the BOC opted to leave rates unchanged the ‘Loonie’ posted modest gains against its US counterpart, despite the negative effect of a strong currency being stressed in the rate announcement. On Thursday the commodity-driven currency strengthened further as Canada’s current-account deficit narrowed by more than anticipated and final US GDP figures failed to match up to initial estimates. However, the currency dropped on Friday as investors lost their appetite for risk. As the week came to a close Canada posted economic growth of 1.7 per cent in March (0.2 per cent more than expected), so the ‘Loonie’ may yet climb before the end of local trade. The Canadian Dollar began the week trading against the US Dollar in the region of 0.9682 and ends the week trading in the region of 0.9680

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