The Pound Sterling fell against the Euro to trade in the region of 1.38 as it came under pressure from Monday’s softer-than-expected UK Manufacturing PMI data and optimism that a deal will be reached between Greece and its creditors. Against the US Dollar, Sterling was trading close to a three-week low. The currency rate could make gains for those looking for money transfers if the upcoming UK Construction PMI comes in positively.
The US Dollar advanced to a new 12-and-a-half year high against the Japanese Yen and firmed against other major peers following the release of upbeat US manufacturing activity and construction spending data, which bolstered expectations for higher interest rates. The ISM index of manufacturing activity came in at 52.8, up from 51.5 in April and ahead of forecasts for a print of 52.0.
The Euro advanced against the Pound and other major peers as speculation increased that European creditors are close to offering a new deal to Greece. German chancellor Angela Merkel held an unscheduled emergency meeting to discuss the situation. The Euro could make further gains if data out of Germany and inflation data out of the Eurozone comes in positively.
The ‘Aussie’ rallied by more than 1% against both the US Dollar and Pound Sterling after the Reserve Bank of Australia left interest rates on hold but hinted that a rate cut could occur later in the year. RBA governor Glenn Stevens said in his statement that the Dollar had further to fall, yet avoided reinstating an explicit bias towards lower interest rates given the full impact of last month’s quarter of a percentage point cut was yet to be felt in the economy.
New Zealand Dollar
The New Zealand Dollar firmed against a number of peers as investors took profits on the US Dollar following the release of Monday’s positive ISM data. With no domestic market moving data due out of New Zealand until next week, the ‘Kiwi’ is set to be influenced by external factors.
The ‘Loonie’ tumbled to a six-week low against the ‘Greenback’ on Monday but managed to regain ground today as investors took profits on the US currency. The Canadian Dollar did find some support from oil prices, which stabilised due to firm demand.