Head of the European Central Bank Mario Draghi’s comments last week rocked the markets as they changed attitude to risk for investors. Market sentiment is one of the biggest movers of exchange rates and Draghi’s comments caused the USD to weaken by nearly 3 cents in a matter of hours, as investors sold off safe haven positions. Stock Markets also rallied so this gives some indication of how much importance the comments had on the markets. This makes it highly likely we will see some kind of announcement and indeed movement on rates this Thursday.
USD – Tonight we have the Fed Meeting which could easily move the dollar. Recent talk of QE may be limited by not as bad as expected GDP figures last week, but this is an important release which could move the market. Friday we have US Non-Farm Payroll data which again could move the market so if you need to trade dollars buying or selling speak to us to find out how to get the best rates.
AUD – The Aussie continues to defy expectations and is touching an all time high against the pound. Will it break through these levels? Well despite uncertainty in Europe investors are confident in the Aussie because o f its strong economy and healthy lack of government and public debt. Compared to the rest of the World the Australian economy is the A star student of debt. It has very strong exports of raw materials and this keeps the economy buoyant. Some say it is too reliant on China but with high interest rates and a solid economic outlook, this currency continues to be bought. If you are looking to buy Aussies with sterling it is likely you will continue to face disappointment.
CAD - Just like the Aussie, the Loonie is retaining strength because the country has a healthy balance sheet, i.e it does not owe lots of money to the rest of the world. Coupled with very strong demand for its natural resources (Oil and Timber to name two) this is keeping the currency strong. If you are considering any CAD trades please feel free to speak to me in order to find out all of your options.