The Rand breaches the key 11 Rand to the USD level

FX Compared currency report

South African Rand

The Rand breached the key 11 Rand to the US Dollar level overnight as emerging markets suffered from another round of sell-offs. Emerging market currencies weakened on Wednesday after minutes from the latest US Federal Reserve meeting suggested policymakers would maintain the pace of a withdrawal of monetary stimulus. Violent protests in Ukraine and Thailand also damaged sentiment towards emerging markets and the disappointing manufacturing data out of China also weighed.

Pound Sterling

The Pound is little moved against the US Dollar and Euro as investors await the release of data due tomorrow which is expected to show that retail sales in the UK declined in January. Economists are expecting sales to have fallen by 1% last month. Yesterday saw Sterling under pressure after a report showed that the UK unemployment rate ticked higher to 7.2%. Losses were limited however as a separate report showed that the number of people claiming unemployment benefit fell.

US Dollar

The US Dollar climbed to its best level in three weeks against a number of peers after Federal Reserve Policy makers said that the turmoil in emerging markets will not cause them to interrupt their stimulus tapering plans. The currency could push higher if this afternoon’s inflation and manufacturing data comes in positively.

The Euro

The Euro fell against the US Dollar for the first time in four days after the Federal Reserve signalled that its plan to reduce its monetary easing programme will continue. The currency came under pressure this morning after mixed data showed that unemployment rose in the Netherlands and inflation fell more than expected in France. Other reports showed that Germany was continuing to improve.

Australian Dollar

The ‘Aussie’ fell against several peers after Chinese manufacturing data disappointed the markets. The HSBC Manufacturing Index fell to a seven month low of 48.3 this month raising concerns that the Chinese economy is slowing. The ‘Aussie’ was weighed upon after its US counterpart found support after the release of the Federal Reserve minutes.

New Zealand Dollar

The New Zealand Dollar is close to two-week lows against the US Dollar and Pound following the release of downbeat data in China. The Asian country is New Zealand’s second biggest export partner so any negative data has an impact on the ‘Kiwi’.

Canadian Dollar

The Canadian Dollar weakened in yesterday’s session after data showed that Canadian wholesale sales fell by 1.4% in December, month-on-month, rather than slipping by 0.4 %. November’s decline was negatively revised to 0.2%.