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Exchange4free Global Forex Report (19/07/2017)


Last week Friday Fed Chair, Janet Yellen, announced an interest rate hike from 1.00% to 1.25%. As a result of some positive economic indicators released during the non-farm payrolls (such as steady growth and lower unemployment) the Fed took a more bullish approach.

In other news, the Republican efforts to repeal and replace the Affordable Care Act (ACA) have failed according to President Trump, however experts say otherwise. As a result the USD crashed yesterday moving higher the 1.3020 mark against the Sterling.


The Euro strengthened to its highest level against the USD in 14 months yesterday.

Markets await the outcome of the European Central Bank (ECB) policy meeting on Thursday. Mario Draghi (President of the ECB) will announce their monetary approach in the Eurozone for the coming months.

It is expected that the ECB will scale back on their asset purchase program to support recent growth in the economy. There is no doubt that Draghi will be questioned on the Euro and its effects on inflation.


The Pound strengthened to a 10 month high against the Dollar on Tuesday before plummeting as a result of inflation dropping to lower than expected to 2.6%.

Lower inflation data has resulted in expectations that the Bank of England will raise interest rates soon.

While inflation has fallen, living standards will remain tight as wages rise by only 2%. Cable continues to remain above the 1.3 (GBP/USD) level today.


While other major currencies have started lifting interest rates, the Reserve Bank of Australia kept theirs fixed earlier this month.

Recently, the Reserve Bank has indicated towards increasing rates as they revealed their opinions on the effects of increasing interest rates in order for the economy to reach its potential growth rate.

The Australian Dollar has continued to strengthen this week against the USD trading around the 0.7935 level.


The Swiss Franc and the Japanese Yen have been evidently the strongest floating currencies since 1973.

A recent analysis performed by economists at Goldman Sachs has revealed that the Yen could currently have over taken the Swiss Franc as safest currency.

The Yen has been aligned most closely to changes in global risk assets in the past few years.


Stats SA released CPI data earlier today for June 2017. The result showed that CPI dropped to 5.1% for June from 5.4% in May, while prices increased on average by 0.2% between May and June 2017.

Tomorrow the South African Reserve Bank will announce their interest rate decision. The expectation is for the rate to remain unchanged, however lower than expected CPI data released today may impact this decision. Other factors affecting this decision include a weak growth outlook for 2017 and 2018, as well as a stronger exchange rate compared to the previous meeting.


The inflation rate in Nigeria fell from 16.3% in May to a thirteenth month low of 16.1% in June. This is still far above the Central Bank’s target band of between 6% and 9%. Prices on average rose by 1.6% from May to June.

Foreign exchange supply has improved in Nigeria, allowing Nigerian banks to boost Dollar card payments and loosen their current restrictions.

Nigerian oil production is also on the rise which will greatly benefit the economy. It is estimated that production has risen to just over 2 million barrels per day.

Exchange4free Global Forex Report (05/07/2017)
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