Dollar drops ahead of G-7

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Pound Sterling

The Pound is trading close to its highest level in three-months against the US Dollar due to speculation that the Bank of England will choose to refrain from expanding its monetary stimulus when it holds its policy meeting later today.

Against the Euro, Sterling was little changed ahead of a report that UK industrial production grew at a slower pace in March. The Office for National Statistics is expected to say that industrial output increased by 0.2% in March compared to the 1% recorded in February.

US Dollar

The ‘Greenback’ has weakened against the Japanese Yen and Sterling due to investors adjusting their holdings of the Japanese currency ahead of the G-7 meeting in London. Investors are concerned that the G-7 may be an opportunity for finance ministers to criticize Japan’s recent economic policies. Against the Euro the Dollar slumped to a three-week low as data out of Germany showed that industrial production in Europe’s largest economy unexpectedly rose, dampening demand for safe-havens.

The Euro

The Euro rallied to its highest level in three-weeks against the US Dollar after industrial production in Germany jumped unexpectedly for a second straight month. Production rose by 1.2% in March. The currency was also supported by Germany’s approval of European Union plans to place all relevant banks under the direct supervision of the European Central Bank.

Australian Dollar

The ‘Aussie’ has strengthened against its peers due to a stronger-than-expected monthly jobs report. Full-time employment in the country increased by 34,500 and part-time employment rose by 15,600. The strong data has increased speculation over the nation’s next move for interest rates.

New Zealand Dollar

The ‘Kiwi’ ended a three-day decline against the US Dollar after data showed that the number of new jobs created in the country hit a new record high in the last quarter. Against its Australian relation the currency rose by 0.6%.

Canadian Dollar

The ‘Loonie’ has hit a twelve-week high against the US Dollar due to a surge in metal prices, boosted commodity demand and renewed confidence in global growth. The currency is now just off parity with the ‘Greenback’.

South African Rand

The Rand strengthened against the US Dollar as demand for riskier assets improved and as the ‘Greenback’ fell against the Euro. The Rand frequently tracks the Euro as the Eurozone is South Africa’s largest trading partner.

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