German Unexpected Growth Improves Zloty Rally

The Polish currency benefited from yesterday’s report indicating an unexpected growth of 0.3 for the German economy in the second quarter, which improved investors’ confidence towards the future of European economic conditions.
Among emergent-market currencies, the zloty is being one of the best performing currencies, and yesterday, Germany’s quarterly GDP report pushed the Polish currency even further to higher levels, as improving economic numbers in the region led traders to speculate that the Polish central bank is likely to stop cutting interest rates, which is favorable for the zloty. The zloty has advanced 19 percent since February when it bottomed out to the lowest level since the country joined the European Union, and being Germany the main trading partner of the Polish nation, yesterday news impacted investors in Warsaw heavily, pushing stocks and the national currency up.
Poland is likely to benefit intensively from the Eurozone economic recovery among the eastern EU members, since its tax cut policy made them able to be the only country in the region to dodge recession in the first quarter. The influence of German economic figures is extremely high in Poland, not only for being the nation’s main trading partner, but also for being the wealthiest and most dynamic economy in the European Union.
EUR/PLN traded at 4.1200 as of 9:51 GMT from a previous close yesterday at 4.1340.

Inflation Figures Affect Pound Performance

The pound started another day losing versus the dollar and the euro in the European session as the Bank of England affirmed that the 2 percent inflation target won’t be met, raising concerns regarding the British economy’s health.
The yen was one of the biggest winners today versus the pound, after Bank of England Governor Mervyn King stated that it will take time for the Great Britain banking sector to recover from the current delicate situation, lowering traders’ bets that interest rates will be raised this year in the United Kingdom. The current recession and credit shortage in the British Isles are likely to set the monthly inflation below the 1 percent barrier, indicating the seriousness of the British financial system situation. It is unlikely that the Great Britain will initiate a substantial recovery before 2010, which weighs massively on the pound.
The previous week rally for the British currency was almost entirely pared as international news, mainly from China, and grim speculations domestically annulled the pound’s chances of continuing to climb further. Due to a extremely liberal credit pre-crisis credit system, the British Isles are being one of the must punished regions in the world with the consequences of the global slump.
GBP/USD traded at 1.6441 as of 10:44 GMT from yesterday’s rate of 1.6457. EUR/GBP climbed to 0.8603 from 0.8574 yesterday.

Polish Zloty Down as Rally May Halt Economic Growth

The Polish currency, which was climbing systematically during the previous two months as signs of economic recovery attracted traders to this emergent European Union economy, had a sharp decline this week as the current currency rates may affect the economic recovery in the nation.
Poland’s economy was the best performer among the 10 eastern European union members in the first quart of this year, after the national government cut taxes to stimulate the economy the zloty climbed 14 percent versus the euro, a rally which is raising concerns about the future conditions of the Polish economy. Today the zloty had the sharpest fall in two months, leading a day of declines in the currency market for eastern European countries, as pessimism brought investors back to safer markets.
EUR/PLN closed today in Warsaw at 4.1736, from an opening price of 4.1215, making the zloty to slide more than 1.5 percent.

Australian Dollar Down on Chinese Negative Data

The Australian Dollar lost today against several currencies like the yen and the U.S. dollar after a negative report in China pushed investors back to safer assets, damping demand for the Aussie’s riskier profile.
The Australian currency lost the most in a week today after Chinese banking data came worse-than-expected by economists, showing a slide in new lending figures and a disappointing rise for fixed-assets investments, indicating that one of the main global economies may still face further months of recession. The New Zealand dollar as well as its Australian counterpart are considered high-yielding currencies despite the current low interest rates in both countries, and these negative reports in China affected the Aussie and the kiwi today, paring much of last week’s gains versus the yen and the greenback.
Economists affirm that last week’s euphoria stimulated forecasts to be set higher, and the Chinese numbers today frustrated most of traders, which were attracted to refuge currencies like the U.S. dollar and the Japanese yen to provide more safety to their portfolios. The currency market tends to remain very volatile until the global economic conditions remain uncertain, and it is hard to predict what direction high-yielding currencies will take towards the end of the year.
AUD/JPY fell to 80.73 as of 10:54 GMT from a previous rate of 81.70 in the intraday comparison. AUD/USD followed the same trend from 0.8417 to a current price of 0.8363.

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Canadian Dollar Down as Oil Declines

The Canadian dollar had a second day of negative performance as unemployment in the nation is expected to grow further, damping demand for the loonie.
After several days breaking records versus its U.S. counterpart, the perfect scenario for a reversal in the Canadian dollar trend occurred today, as stocks and commodities fell, influencing negatively the loonie’s performance. Reports due tomorrow are likely to indicated improved employed conditions in the U.S., speculations which helped the greenback to pare some of its latest losses versus the loonie.
USD/CAD traded at 1.0770 as of 22:41 GMT from yesterday’s rate of 1.0700.

Brazilian Real Falls on Commodities Decline

Brazil’s real, the best performing among the 16 most traded currencies had the most significant fall in more than a month as commodities declined today, pushing investors away from the South American currency.
A number of important Brazilian exports had a decline in their prices today as U.S. services industries contracted, forcing virtually all commodities down today. Brazil is one of the biggest global supplies for grain and metallic commodities, and today’s decline brought the real to the first negative performance in a week.
USD/BRL traded at 1.8255 as of 22:21 GMT from an opening price of 1.8141.