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.
The Australian, Canadian and New Zealand dollars all flew up against the pound overnight, as the US releases a slew of upbeat economic data, aiding foreign exchange risk appetite.
This data includes the fact that US manufacturing returned to growth in October, jumping to 51.7 according to ISM, while consumer confidence hit 72.2, its highest point since before the financial crash in February 2008. This, more than anything, fed the idea that the United States might be past the worst.
This aided the Aussie, kiwi and loonie dollars because the US is the world’s largest economy. Its good health therefore benefits the world as a whole, encouraging investors to smaller currencies and economies such as Australia and Canada. As Marito Ueda at FX Prime Corp notes “Investors are getting more optimistic about the outlook for the U.S. economy.”
Looking ahead meanwhile, these three currencies could be due further gains today, as the US releases its monthly Non-Farm Payroll. This reveals the number of new jobs created in non-agricultural sectors, and is a key indicator of US economic health. If the number beats forecasts (of 125k) that will boost sentiment, and further aid these risk-dependent currencies.
Outside the US, it’s an important day for other countries too. The latest UK construction PMI is released today, telling us whether building activity has picked up. This has been the weakest link in the UK economy recently, so a positive sign could boost the pound.
Elsewhere, Eurozone manufacturing data is released, which will tell us if the continent has continued its eight-month decline. Last of all, Canadian unemployment numbers also see release, which will tell us if the United States’ northern neighbour has continued its fantastic job creation streak (52.1k jobs last month.)
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