unemployment levels in Spain and Greece is over 25%

Daily Currency update

Pound Sterling

The Pound fell to a one-week low against the Euro yesterday after the latest British manufacturing data showed that the sector shrank more than expected last month. The loss was reversed however due to the release of disappointing European PMI and unemployment data.
Against the US Dollar the Pound made gains due to a better-than-expected manufacturing survey out of the USA. Risk appetite improved as a result aiding ‘Sterling’.  The markets will now look to Thursday’s Bank of England’s policy meeting to gauge the currency’s next move.

US Dollar

Market concerns over the prospect of the Federal Reserve sustaining its monetary stimulus plans have caused the ‘Greenback’ to weaken against the majority of its peers. Weak U.S employment data has raised fears that the world’s largest economy is still struggling to shrug off the global slowdown. The Dollar was also not helped by the US producing a better-than-expected manufacturing survey, which boosted risk appetite and weakened demand for the currency.

The Euro

The Euro has moved higher against the US Dollar rising above yesterday’s three week low. The strong manufacturing data out of the US boosted demand for the single currency but these gains are expected to be short-lived as concerns continue to mount over the health of Europe’s economy. Yesterday’s disappointing PMI data and terrible unemployment figures caused the Euro to slip against the Pound despite the UK also posting poor manufacturing data.

The Euro zone’s unemployment level rose again breaking all records as it surpassed the 11% mark. In troubled nations Spain and Greece, the unemployment level is over 25%. These terrible figures are sure to catch up with the single currency and we can expect it to take a dive in the near future, unless the Euro crisis is resolved or measures are implemented to ensure that it will be.

Australian Dollar

The ‘Aussie’ has dropped against its 16 major peers following the unexpected decision by the Australian Central Bank to slash interest rates by 25 basis points. The currency dropped to a three week low against its US counterpart as markets were taken by surprise. The Reserve Bank of Australia’s decision sees interest rates cut to their lowest level since 2009. It is now expected that the ‘Aussie’ will drop further potentially declining to $1.0250 over the next few days.

New Zealand Dollar

The ‘Kiwi’ followed its Australian relation by weakening against a number of its peers due to the Australian Reserve Bank’s decision to cut interest rates by 25 points. Its decline was limited however due to data out of China indicating that the world’s second largest economy is showing signs of contraction. The markets are predicting that the Chinese government will introduce a new round of monetary stimulus in an effort to boost growth; such a move will benefit the ‘Kiwi’ and ‘Aussie’.

Canadian Dollar

The ‘Loonie’ has edged higher against its US relation due to the better-than-expected US manufacturing data released yesterday. The data dampened concerns that the world is heading towards a new global economic slowdown and spurred demand for riskier currencies including the Canadian Dollar.