Good morning and welcome to today’s foreign exchange market commentary on 5th of June.
Here are MyCurrencyTransfer.com’s top 5 currency highlights:
- GBP rallies against greenback ahead of highly anticipated BoE, ECB rate meets
- EUR treading low ahead of ECB meet
- USD on the defensive from GBP rally, strong UK PMI underpins
- Abe’s plan to revive Japan disliked by market participants
- RBA keeps policy rate unchanged
CURRENCY RATES OVERVIEW
GBP/EURO – 1.1743
GBP/USD – 1.5351
GBP/CHF – 1.4530
GBP/CAD – 1.5863
GBP/AUD – 1.6050
GBP/ZAR – 15.1752
GBP/JPY – 152.9369
GBP/HKD – 11.9138
GBP/NZD – 1.9209
GBP/SEK – 10.1364
Mid-market rates as of 2013-06-05 13:02 UTC
Key releases in the next 24 hours that may affect currency date:
Australia: AUD AiG Performance of Service Index (MAY)
Europe: No Data
United Kingdom: No Data
New Zealand: No Data
United States of America: USD ADP Employment Change (MAY), USD Factory Orders (APR), USD USD ISM Non-Manufacutring Composite (MAY), USD US Federal Reserve Releases Beige Book
China: No Data
Canada: CAD Building Permits (MoM) (APR)
Japan: JPY Japan Buying Foreign Bonds (Yen) (MAY 31), JPY Japan Buying Foreign Stocks (Yen) (MAY 31)
GBP rallies against greenback ahead of highly anticipated BoE, ECB rate meets
GBP continued its advance against the greenback on Wednesday morning against both the euro and the USD. Expectations are rife that with the Euro also gaining against the USD, it is time for a scale-back of USD’s strength. The GBP/USD pair is now trading at the highest level it has been in a month. This trend looks more than likely to continue through this trading session ahead of of tomorrow’s all-important Bank of England and European Central Bank rate decision meetings.
EUR treading low ahead of ECB meet
EUR treaded lows of 1.3051 against the USD on Wednesday morning ahead of the European Central Bank (ECB) policy meeting as an initial GDP indicator report witnessed growth rate contracting by another 0.2% in the first-quarter, while retail spending figure also dipped by a further 0.5% in April.
As the Eurozone battles a prolonged recession, ECB continues to be all set to lower its outlook for growth and inflation, and it is expected that implementation of a negative interest rate policy across the euro-area may become the flavor of the day as the governments operating under the Euro system become even more reliant on external monetary aid.
USD on the defensive from GBP rally, strong UK PMI underpins
USD continued to defend itself against most of its peers in its Wednesday trading session, with exceptions being the Yen and the GBP. The USD/GBP pair increased to reach the 1.5370 region owing to stronger-than-expected UK service PMI data.
Abe’s plan to revive Japan disliked by market participants
On Wednesday the next steps of Japanese Finance Minister Abe plan to stimulate economic growth in Japan were unveiled plan. In what appeared to be a closely followed speech from Mr Abe, he stated that special economic areas would be created to attract foreign investors, incomes would be increased by 3% on an annual basis and the electricity industry would be fully liberalized. However the so-called “Third Arrow” reforms that he conveyed were not viewed in a positive light by Japanese markets. The Nikkei retracted by 3.8% following Mr Abe’s speech.
RBA keeps policy rate unchanged
Growth figures released from Australia fell short forecasts and expectations yesterday, as a fall in levels of investment offset the progress made with regards to exports and consumer spending. Expansion in economy was observed at an annual rate of 2.5% in the January to March quarter. Compared with the previous three months, growth was pegged at 0.6%, however analysts had forecasted an annual growth rate of around 2.7%. Expectations are rife that this falling-short-of-expectations, might promote the idea of rate cut to the Reserve Bank of Australia (RBA). On Tuesday, RBA decided to maintain its benchmark rate at the same low level of 2.75%.
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