Exchange Rates Today: Pound Euro Dollar Yen And New Zealand Dollar Currency Outlook And Analysis

Published: 24 Jul 2014 23:27 Forex

currency rates today
Exchange Rates Today: Pound Euro Dollar Yen and New Zealand Dollar Currency Outlook and Analysis - A day of low volatility generally is expected on the markets today as a lack of really meaningful data prevents clear trading rationale for market participants. A key release of the last 24 hrs being saw the Reserve Bank of New Zealand increase the base rate of interest to 3.5% whilst attempting to prevent too much appreciation by talking down the currency’s prospects.

At 10:00am (UK Time) on Thursday Sterling (GBP) values were such that the Pound to Euro exchange rate was 1.2628 (-0.21%) GBP EUR, Pound to Dollar exchange rate was at 1.7014 (-0.15%) GBP USD, at 1.8252 (-0.19%) versus the Canadian Dollar (CAD), at 1.8020 (-0.16%) versus the Australian Dollar (AUD), at 1.9832 (+0.25%) versus the New Zealand Dollar (NZD) and at 172.70 (-0.16%) versus the Japanese Yen.

Sterling (GBP) sees mainly 2nd and 3rd tier data releases in the form of Retail Sales figures which printed at 3.6%, below the expected 3.9% forecast by most analysts. The year on year figure dropped to 4.0% from 4.5% which cast an element on negativity on Sterling which has given up value today to further consolidate yesterday’s losses.

The Euro (EUR) sees a number of French and Euro-zone data releases during the day. The French Purchasing Managers Index (PMI) saw an above expactation print at 49.4 versus an expected 48.3. The Euro-zone composite PMI figure saw an above forecast print of 54.0 versus 52.8, giving a rare bright spot on the horizon for the Euro.

The US Dollar (USD) sees employment data releases during the day today at 12:30pm (GMT) as well as New Home Sales. Any print in line with or above forecast will further support the US economic recovery story and likely result in a strengthened US Dollar.

The Japanese Yen (JPY) sees the release of Consumer Price Index (CPI) data at 23:30pm (GMT) which could serve to prevent further losses for the Yen if it prints above the forecast of 3.5%.

The New Zealand Dollar (NZD) dropped significantly as the Reserve Bank of New Zealand (RBNZ) adopted a strategy of devaluation and indicated that a significant fall in the value of the “Kiwi” currency could be imminent. Alvin Tan of Societe General stated that “It’s essentially a pretty dovish commentary from the RBNZ and the Kiwi’s getting hit on that, the long.

Currency Exchange Update - 24/07/2014

Pound Sterling (GBP) suffered heavily on Thursday as it dropped back on disappointing retail sales figures and an above expectation US employment data print. Signs are appearing that the US economy may be starting to “awaken” and therefore the Pound is suffering on directional trading flows.

The British Pound (GBP) saw a Retail Sales year on year figure of 4.0%, significantly below the forecast value of 4.6%, and a significant reduction on the previous print of 4.5%.The shock data rapidly took the gloss of Sterling and led to traders reassessing their “long” positions in the currency. This data along with recent weakness in the UK housing market has seen the Pound, which had been making unassailable gains drop back in value significantly during the day.

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The Euro (EUR) had a better day as Euro-zone data printed ahead of forecast and gave the maligned Euro a boost. The German Composite Purchasing Managers Index (PMI) printed at 55.9 well ahead of the forecast 53.8 and the Euro-zone equivalent at 54.0 ahead of the 52.8 forecast. The Euro also benefitted as the Spanish Jobless Rate dropped below 25% for the first time in 2 years in an early indication that the economy may be picking up. Jose Luis Martinez, economist at Citi in Madrid stated that "These figures are much better than expected and while there's an important seasonal element, seasonally adjusted figures are also strong,"

The US Dollar to Pound exchange rate (USD/GBP) gained strongly for the second consecutive day as an unexpectedly good employment print boost demand for the Dollar. Applications for unemployed status dropped to an 8 year low in a real sign of increasing economic activity. Brad Bechtel of Faros Trading said that “The momentum was already headed this way in the dollar and U.S. equities -- the data helps it along, it confirms what people had already been doing, monetary policy remains ultra-accommodative and the economy is cruising along in the right direction.”

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