The US dollar is suffering from losses across the board. Out of the three currencies that I’ve covered, only the Canadian dollar stayed behind. The Pound and the Aussie continued enjoyed the dollar’s fall. Here’s an overview of the week so far, and an outlook towards the data-rich Thursday and Friday.
British Pound
Original coverage: Britain’s Got Talent
The British Pound enjoyed the dollar weakness as well as good PMI figures. GBP/USD now trades at 1.6539.
Manufacturing PMI, published on Monday, rose from 43.1 to 45.4. This exceeded expectations of a more modest rise to 44.1. Today’s (Wednesday) Services PMI also exceeded expectations, and climbed from 48.7 to 51.7. This not only exceeded expectations, but also passed the critical 50 mark. This means that the industry is expanding.
These good figures, and the general dollar weakness have sent cable nicely upwards. It went as high as 1.6662, very close to the resistance line at 1.6670. I’m happy to see that my technical analysis proved correct – the road north sure was open for the British Pound.
Tomorrow is a critical day for the Pound, with a new interest rate, and news on the Quantitative Easing program.
Australian Dollar
Original coverage: Will Australia go Down Under? Aussie Outlook
Australia didn’t go down under! The land down under remains the only country in the West that isn’t in recession. In the first quarter, Australian GDP rose by 0.4%, contrary to early expectations for a fall of 0.1%. So, the economy contracted only in the first quarter.
Australian Building Approvals were also good – they rose by 5.1%, much better than the original expectations for a 2.1% rise. Also last month’s figures were revised upwards. Retail Sales were somewhat disappointing, rising only by 0.3% and not by 0.5%. It’s still positive…
Australian Cash Rate stayed at 3%. The RBA hinted that this isn’t the bottom though, taking out some of the back wind behind the Aussie.
All in all, the Austrlian dollar pushed forward, reaching 0.8264 at the peak. AUD/USD now trades at 0.8215.
Canadian Dollar
Original coverage: Loonie At Parity? Canadian Dollar Outlook
The loonie stayed behind. USD/CAD had a good start (for the Canadian dollar), going as low as 1.0790 at the beginning of the week. Monthly GDP in Canada fell by 0.3% as expected.
But the Canadian dollar’s strength was short-lived. The area of 1.08 proved to be a strong support line. It served as a strong resistance line in September 2008.
Without additional economic indicators in Canada, the loonie failed to breach this line, and bounced back. USD/CAD now trades at 1.0890.
But tomorrow is another day: Building Permits, new interest rate decision and Ivey PMI will all shake the loonie. Hold tight!