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Exchange4free Global Forex Report (04/04/2017)


The US Dollar strengthens after the (better than expected) Automatic Data Processing Inc. payrolls data came out. In March we saw strong jobs growth as well as non farm payrolls increasing by 263k jobs (from February to March) according to the latest ADP national employment report; this, beating the expected increase of 185k.

Donald Trump has claimed credit for the acceleration in the pace of job growth, as businesses look at the possibility of tax cuts, deregulation and infrastructure spending.


The European Central Bank President Mario Draghi insisted the bank’s monetary policy stance remained appropriate today and stressed confidence would be needed for the central bank to change tact.

The ECB chief reaffirmed his stance the central bank would not need to deviate from its generous asset-buying program until at least the end of the year. The ECB’s rates of asset purchases are set to continue until at least the end of December, albeit at a reduced monthly rate of 60 billion euros from April. Inflation outlook remains unchanged.


The Sterling is currently buying EUR 1.17, after shooting up from EUR 1.16 yesterday. This was brought on by the sizeable boost from the Markit services PMI data, which shocked forecasters by beating expectations.

After a dreary start to the week, the pound has rallied against major peers on the back of robust services figures for March that surpassed expectation.


The Australian dollar is struggling to find traction following the release of the Reserve Bank of Australia’s April Monetary Policy Statement on Tuesday. The markets perceived the tone of the statement to be far less optimistic on the outlook for the Australian economy than that communicated previously.

The Australian dollar versus US dollar offered little to excite investors through trade yesterday, bouncing amid a 30 point range and failing to recoup losses suffered earlier in the week.


The Swiss franc had a quiet March, its trade-weighted index moving within just a 0.75 per cent range. A steady EUR/CHF rate around 1.07 has left one-month implied volatility in the pairing at about 5.2 per cent.

The Swiss National Bank continuing to engage in a policy that can best be described as containment, the CHF is rapidly losing its appeal as the go-to safe haven currency.


The Naira weakened against the US dollar on the black market yesterday, even as the central bank increased supply of US dollars to attempt to boost support for the local currency. We have seen over the past couple of weeks a stronger Naira (black market) due to the central bank controlling the supply of the US dollars.

We will need to wait and see how long the central bank can keep up supplying US dollars into the market to keep the black market rates from pulling away from the official rate.


The South African Rand has been extremely volatile over the past week losing ground towards the 13.77 mark against the US Dollar. While not the worst that it has been in recent times, it certainly erased a lot of the gain seen over the past few months.

News driving the weakening Rand since last week includes a cabinet reshuffle by the government, a new finance minister, a rating downgrade of foreign debt by S&P Global ratings as well as potential downgrades by other ratings agencies in coming months.

Despite global conditions favouring Emerging Market currencies, the Rand is expected to weaken further in the near term according to various market analysts.

Tomorrow will see the release of US unemployment data. A positive result for the US could increase pressure on the rand and other emerging markets.

Exchange4free Global Forex Report (30/03/2017)
Exchange4free Global Forex Report (19/04/2017)

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