Dear Subscriber, Please find below today's update which gives you an insight into the current market conditions, enabling you to keep informed and up to date on the latest currency movements. Headlines • UK services PMI dips modestly in September - prints at 60.3
• Eurozone services PMI and retail sales climb - Euro broadly strengthens
• US Non-farm payrolls won't be published - Federal shutdown lumbers on
• RBA still willing to reduce rates further - weaker 'Aussie' desirable. Sterling After a bullish start to the week, the Pound tripped up yesterday as UK house prices increased at a slower rate than expected and domestic services PMI came in at 60.3 in September rather than the 60.5 expected. Whilst all of this week's UK data points to a broad-based recovery - and more rapid growth than either the government or Bank of England appeared to expect - the Pound softened by the most for two weeks against the Euro as the common currency was boosted by encouraging news from the Eurozone. It also posted its first decline against the US Dollar for four days. With investors speculating that its recent rally was overdone, Sterling edged away from its nine-month high against the US Dollar in spite of the political concerns weighing on the North American asset. Euro Several pieces of better-than-forecast data left the Euro riding-high as the European session closed yesterday. The common currency gained notably on the Pound and jumped to an eight-month high against the 'Greenback' after the Eurozone's services sector expanded by more than estimated, with PMI of 52.2 in September rather than the 52.1 initially recorded. Gains were consolidated after a retail sales report for the currency bloc showed that sales declined by 0.3 per cent in August, year-on-year - considerably less than the drop of 1.5 per cent predicted. News that the Portuguese government has upwardly revised its growth forecast for 2014 following the completion of the Troika's latest review of Portugal's bailout lent the Euro additional support overnight.
US Dollar With the debt ceiling fast approaching, US lawmakers failing to reach an agreement which would bring an end to the Federal shutdown and the odds of the Federal Reserve tapering stimulus falling by the day, the US Dollar was trapped in a bearish relationship with peers like the Euro yesterday. However, the 'Greenback' recovered recent losses against a broadly softening Pound as investors labelled the British currency's recent surge excessive. While the highly influential US non-farms payrolls report was scheduled for publication at 13:00 GMT today, the ongoing government shutdown is preventing its release. The report was expected to show that the US economy added 180,000 positions in September. If accurate, the result would have gone a long way to increasing the likelihood of the Fed reining in easing before the end of the year. Canadian Dollar The 'Loonie' was trading in a tight range against both the Pound and US Dollar yesterday as a lack of pertinent domestic data and weighty political pressures from the US restricted CAD movement. Fears that Canadian growth will suffer as a result of the federal shutdown left the Canadian Dollar close to a two-week low and trading in its tightest range against its US counterpart for six months. The commodity-driven asset fluctuated modestly against the Pound as investors digested UK services and house price reports. Canadian Dollar fluctuations could occur before the weekend in response to Canada's Ivey PMI. Australian Dollar With investors betting that the Reserve Bank of Australia will refrain from issuing an additional rate increase before the close of 2013, the 'Aussie' was supported. The Australian Dollar also benefited from the expectation that next week's services data for China will show improvement. The South Pacific asset advanced against the majority of its most traded rivals during the local session and is heading for a five-day gain against the US Dollar and Pound.
New Zealand Dollar After posting a significant decline against the US Dollar last week, the 'Kiwi' has enjoyed something of a rebound in recent days. As the 'Greenback' softened in the face of the ongoing political fracas in the US, the New Zealand Dollar advanced, posting a five-day gain of 0.6 per cent on its North American counterpart. If you need any further assistance, or require a live dealing quote - please do not hesitate to contact me on 01736 335250 or send an email to info@torfx.com Regards,
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