Welcome to the Pure FX account of the latest changes in the foreign exchange rates.
This is intended as a brief guide to movements in the exchange rates overnight, to put you in the best position for when you exchange currencies.
Australian Job Creation Beats Forecasts
The Australian dollar came out ahead overnight, including against the pound, as the local economy creates almost four times as many jobs as forecast in September.
Australia created 14.5k roles last month, beating out predictions for a 3.75k rise. Moreover, though the unemployment rate rose +0.1% to 5.4%, this was for the best of reasons: more people decided to start looking for work, raising the participation rate.
This therefore tells us that, though the mining boom may be nearing its peak, Australia retains an economically enviable position compared to most countries. Hence, the rising local currency.
Loonie Falls on Global Growth Concerns
Elsewhere, the Canadian dollar had a tough time yesterday compared to its commodity counterpart, losing out against the pound and US dollar. This was because of ominous developments in the global economy, for which the loonie dollar is sometimes a proxy.
This week, the IMF predicted that global growth in 2012 would reach just 3.3%, -0.2% down compared to its prediction three months ago. Furthermore, it also cut its forecast for next year too.
This limited confidence among global investors, sending down the value of commodities such as oil and iron, on which Canada’s economy depends. Hence the falling loonie, in spite of the fact that this news did not directly relate to Canada.
Spanish Credit Rating Cut
Last but not least, the euro is largely unchanged today, in spite of the fact that credit rating agency Standard & Poor’s has cut its Spain rating.
S&P cut Spain two notches from BBB+ to BBB- with Negative outlook today, just one notch above Junk, reflecting the growing economic crisis in the country. As S&P press release states, “The deepening economic recession is limiting the Spanish government’s policy options.”
Hence the downgrade, although as I mention this hasn’t had much immediate effect on the euro, perhaps because it was expected.
Find Out More
I do hope you’ve enjoyed reading this post. To find out more:
Read our Daily Market Commentary to find out what’s affecting the rates today.
Take a look at our Foreign Currency Exchange Advice articles.
Look through our Top Tips to maximise your foreign currency transfer.