Brazilian Real Down on Trade Surplus Revision

Domestic and International events brought the Brazilian currency down today after touching the highest rate in one year last week, suffering the consequences of corrective movements in trading markets combined with a degree of pessimism.
The Brazilian real declined today after the trade surplus target was lowered by the country’s government, suggesting that the global economic situation is still influencing negatively on the demand for South American products, causing the real to lose almost 1 percent versus the greenback in the end of today’s session.
USD/BRL closed today’s session at 1.8143 from an opening price of 1.8093.

Canadian Dollar Declines Further on Commodities

The Canadian currency, highly linked to commodities and equities markets fluctuations declined today as corrective movements affected stocks globally, as optimism is not as significant as last week among investors.
The loonie, as often the Canadian currency is associated, declined extending losses of last week’s session end, when it declined from a one-year high versus the greenback on renewed global economic optimism. Bank of Canada officials mentioned multiple times that a strong loonie may jeopardize the national economic rebound, since the North American country economy is highly dependent on exports.
USD/CAD traded at 1.0780 as of 10:38 GMT, from a previous rate of 1.0695 yesterday.

Will the Pound Trade at 1-to-1 Versus the Euro?

The pound continued to decline today versus most of the 16 main traded currencies on concerns that Lloyds Plc financial conditions are far from being sustainable, increasing speculations that the British banking sector may delay an economic recovery in the country.
The U.S. dollar touched a two-weeks high versus the pound as the Lloyds Banking Group Plc affirmed that it may exit a government program to insure other positions, leaving room for suspicions that one of the main British banking groups is having a hard time to stabilize its accounts. The euro also gained versus the British currency, touching the 90 pence level for the first time in 5 months, as the Eurozone is providing traders with more solid evidences of recovery, raising attractiveness for the euro in the regional aspect. The yen also pared most of its losses versus the pound this week, as today, the demand for high-yield declined slightly.
The financial scenario in Great Britain still is far from optimistic, considering it was one of the countries with the most liberal policy towards loans before the crisis, facing the biggest issues when the credit crunch struck the world last year. Domestic problems and international optimism can lead the pound to lose further versus majors, and it is not impossible that, in the medium term, the pound will trade in equality to the euro.
EUR/GBP traded at 0.8987 as of 11:18 GMT from a previous rate of 0.8905 yesterday. GBP/USD traded at 1.6356 from 1.6537.

Dollar Suffers Another Hit as China Posts Industrial Growth

The dollar had a week of extremely negative performance hitting several record lows versus most of the main 16 currencies as demand for yield and investors’ confidence rose worldwide, this time, fueled by two reports in China that added to the already growing optimism in trading markets.
Today in Europe, the dollar extended its losses versus the euro as countries like Germany and France are raising attractiveness for assets in the region, as this countries are posting the quickest and most favorable news regarding economic improvements. The British pound also posted significant gains versus the U.S. currency hitting a one month high after producer prices in the United Kingdom climbed for a sixth straight month, suggesting that one of the countries that most suffered with the credit crunch in Europe may be already in a process of recovery, which upgraded the pound’s outlook.
Economists analyze with a certain degree of pessimism the current situation for the U.S. currency. The dollar has been hit massively this week by an outflow of capital towards higher-yielding options, and the sentiment regarding the greenback could not be worse, as most of analysts suggest that the dollar downtrend may proceed further to an undetermined period of time and level, as long as the economic recovery continues.
EUR/USD traded at 1.4591 as of 11:34 GMT from a previous rate of 1.4555 in the intraday comparison. GBP/USD touched 1.6735 from 1.6513.

Australian Dollar Rebounds on Chinese Data

The Australian dollar was affected yesterday by a series of negative domestic reports that halted a rally which set the currency to a one year high versus the greenback, but today, after favorable reports coming from Asia, the Aussie managed to reestablish its previous winning trend.
The Australian currency climbed today versus several lower-yielding trading options, as stocks surged in Asia benefiting from two reports in China which indicated a more-than-expected rise in the industrial output and increased new lending figures, suggesting that one of the main trading partners of the South Pacific region is recovering from the current crisis. The New Zealand dollar, normally associated to the Aussie’s movements since several factors affect both countries’ currencies, also climbed further, reaching the ninth week in a row of gains versus the greenback, raising concerns in the Reserve Bank of New Zealand that a strong currency may affect the country’s recovery.
According to analysts, the recovery in China is more than essential for Australia’s economy growth, since the Asian country is the main destination for Australian exports. After yesterday’s negative reports that led to speculations regarding a delay in interest rate hikes, the Aussie is once again bullish, indicating that optimism in the region remains strong.
AUD/USD traded at 0.8643 as of 10:56 GMT after bottoming at 0.8555 yesterday. EUR/AUD traded at 1.6896 from 1.6999.

Pound Climbs on Bank of England Strategic Changes

The pound reached the highest level in almost a month versus the U.S. dollar and gained versus the euro after Bank of England statements regarding its strategy to stimulate the faltering British economy revived investors’ confidence in the United Kingdom’s currency.
After the Bank of England officials’ declarations indicating that the asset-purchasing program will not be extended further, as it has been previously, the confidence towards the U.K.’s currency improved, as interest rates in the country also remained unchanged, helping traders to be more attracted to inject capital in the British Isles. The pound rose versus the euro, rebounding from a one-week low, and higher-yielding currencies also declined as a rally in stocks that lasted five days was halted as concerns regarding the Chinese economic recovery emerged.
Bank of England’s strategic change was not a consensus among analysts, since a significant amount of them bet on the extension of the asset-purchase program, which would be definitely weighing negatively on the pound’s outlook. Currently, the expectations towards an economic recovery in the U.K. are more optimist, since Eurozone countries like Germany, one of the main immediate U.K.’s trading partners is also rebounding, fact which could accelerate the process of recovering for the Northern European nation.
GBP/USD traded at 1.6623 as of 12:28 GMT from a previous rate of 1.6529 yesterday. EUR/GBP traded at 0.8755 from 0.8806.

Australian Dollar Slides on Job Figures

As unemployment surged in the South Pacific nation of Australia, speculations that interest rates will be hiked before the end of the year decreased, making the Aussie to post its first decline this week versus most of the main traded currencies.
Today a report in Australia indicated job losses that came at almost a double rate than what forecasts expected, influencing the South Pacific currency further down after negative reports yesterday that made the currency to drop from a one-year high versus the greenback, as retail sales and home loan approvals declined in the country. Even if several negative news stopped the Aussie’s rally this week, it still remains the best performing currency among the 16 most traded, followed by the Brazilian real in second and its counterpart, the New Zealand dollar, that was also affected by a bearish market sentiment today towards the South Pacific region.
After this week’s negative data for the Aussie, analysts have reached a consensus that interest rates in Australia are unlikely to be hiked before December, fact which is weighing on the Australian currency performance this Thursday, adding to the already pessimist wave of negative reports that unexpectedly downgraded the outlook for South Pacific currencies.
AUD/USD traded at 0.8558 as of 10:37 GMT from 0.8617 in the intraday comparison. AUD/CAD traded at 0.9288 from 0.9312.

Pound Climbs on U.K. Manufacturing

The pound climbed today versus most of the 6 main traded currencies as the situation starts to become more positive for the British economy, pushing stocks up in London and consequently attracting international inflows of capitals to the United Kingdom.
After U.K. manufacturing output had the highest climb in 18 months today in a report published by the Office for National Statistics, the pound rose sharply, gaining virtually against all 16 main traded currencies worldwide, rebounding from a rather weak performance last week, when a wave of pessimism still affected pound-priced assets attractiveness. Stocks in the U.K. rose to the highest level since October last year, when the credit crunch plunged the British Isles into a intense sequence of losses in multiple bearish market weeks. U.K. manufacturing went much beyond forecasts, which suggested a 0.3 percent increase for the past month, but the actual report indicated an amazing 0.9 jump, being this surprising figures the main vector to push the pound up today in foreign-exchange markets.
According to many analysts, the pound remains undervalued, still suffering the consequences of the credit crunch that caused the biggest crisis in the country since the Second World War, but if favorable news still follow, the pound may find support for a big uptrend in the following months.
GBP/USD traded at 1.6554 as of 12:41 GMT from a previous rate of 1.6382 yesterday. EUR/GBP traded at 0.8744 after being traded at 0.8777 before the report was published.

World Economic Rebound Forces Dollar Down

The dollar is losing this week versus important major currencies like the euro and the pound as renewed optimism towards an economic recovery damped demand for the safety profile of the United States currency, as investors moved their bets to riskier assets.
A combination of bullish stock markets and speculations regarding an upcoming credit report in the United States affected the dollar negatively, as at the same time that investors seek higher yielding options as stocks grow, the U.S. credit report to be released today is likely to show a sharp fall, which is decreasing attractiveness for the greenback. The Japanese yen was one the biggest winners versus the greenback today as the government is likely to extend its measures to stimulate the economy, bringing renewed confidence towards the Japanese economy, which posted today a report indicating a fall in the numbers of bankruptcies for the first time in three monhts.
The bullish sentiment in equities markets is weighing negatively for the dollar, as being the main global reserve currency in the world, its safety profile attractiveness is decreasing thanks to a higher level of risk aversion among traders. Currencies like the yen and the pound still have room to climb versus the U.S. dollar, but its unlikely that the greenback will lose sharply, at least in the short-term.
USD/JPY traded at 92.31 as of 9:06 GMT from a previous rate of 93.17 in the intraday comparison. EUR/USD traded at 1.4418 from 1.4344.

Canadian Dollar Extend Gains on U.S. Optimism

The Canadian currency climbed even further before the end of this week’s session after optimism was renewed among traders with stocks and commodities climbing, After both Canada and the U.S. posted favorable reports regarding employment conditions.
After a report published in Ottawa indicating a rise of 27,100 jobs for the month of August in Canada, reverting July’s negative figures, the loonie was benefited as stocks in Toronto also rose considerably. This Friday, a U.S. report showing less than expected jobs cuts moved markets worldwide, creating bullish patterns in stocks around the world and influencing the crude oil rates, commodity which prices affect the Canadian currency directly, since the North American nation is one of the world top oil producers. The Canadian dollar had suffered since Bank of Canada officials stated that measures could be taken to weaken the currency, creating a bad sentiment for the currency, but the optimism is currently very strong, making an unstoppable bullish pattern for the loonie.
Analysts forecast that the Canadian dollar may rise to the levels previous to the national bank statements, when the greenback was trading at 1.0630, as long as optimism remains significant in equities and commodities markets, but it is hard to determine whether loonie’s bullish pattern will find support to extend its gains since the Bank of Canada already stated its position against a strong national currency.
USD/CAD closed the week at 1.0860 from 1.1039 on Thursday.

Swedish Krona Declines on Extended Loans

The Swedish currency declined today versus the euro and most of the 16 main traded currencies as the national central bank maintained interest rate in its historic record low of 0.25 percent leaving space for speculations that the country financial system is still facing a complicated situation.
The krona declined today versus several currencies after the Riksbank affirmed that it will offer more than $10 billion to Swedish bank to avoid the current banking crisis in the country, maintaining also the current interest rates at a record low of 0.25 percent, in order to stimulate credit and consumption to rescue the country’s economy from recession. The negative news for the Swedish currency also came with a statement from the nation’s central bank indicating that interest rates in the country will remain at extremely low levels through the next year, declining attractiveness for investors to beat in Swedish assets.
Even if the Swedish economy starts to give signs indicating that the worst moments are already behind, the situation remain very uncertain, and the expected maintenance of the rates at the record low level came together with an extremely dovish tone on Riksbank statement, shunning investors from Sweden and decreasing attractiveness for the krona, which may help Swedish products’ competitiveness, selling to markets at lower prices.
EUR/SEK traded at 10.2955 from 10.3550 in the intraday comparison.

Euro Gains Before ECB Meeting

The euro rebounded today after a negative performance during the beginning of the week as speculations regarding the future of the Eurozone economy improved, indicating growth beyond previous forecasts, spurring the attractiveness for the euro today.
The European central bank will decide its current benchmark interest rates which are expected to be maintained at the same level, but optimism among traders indicate that ECB officials are likely to upgrade growth predictions for the Eurozone as the economy starts to improve slowly as seen in report during the past month. The euro also benefited from optimism in equities and commodities markets today, stopping a seven day decline versus the Japanese yen as investors returned to purchase riskier assets abandoning options in Japan. The euro also gained against some high-yielding currencies, on speculations that some countries like Germany, may rebound quicker from the recession.
The ECB metting today is going to provide support for the euro to gain, according to specialists. Previous reports published in July mainly regarding Germany and France are likely to be mentioned by the ECB as signs of recovery in the region, which will attract more investors to purchase euro-price assets. If the Eurozone continues to perform well, interest rates are likely to be hiked in the medium term future.
EUR/USD traded at 1.4325 as of 10:27 GMT from a previous rate of 1.4217 in the intraday. EUR/JPY traded at 132.34 from 131.66.

Canadian Dollar Impacted by Declining Commodities Demand

The Canadian dollar is having one of worst performances this week in more than 2 months as risk appetite is declining worldwide, affecting currencies that perform well on growing optimism.
The loonie has been influenced since the past week when Bank of Canada officials affirmed that a strong loonie could jeopardize the nation’s economic performance, and since then, a strong wave of risk aversion also affected stocks and commodities, assets which play a fundamental role to decide the loonie’s trends.
USD/CAD traded at 1.1053 as of 11:06 GMT from 1.1037 yesterday.