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Exchange4free Global Forex Report (29/06/2017)


On Tuesday, the Dollar took a bit of a downturn following adjusted growth forecasts for 2017 by the International Monetary Fund (IMF). The forecast is down from 2.3 percent to 2.1 percent.

The US Dollar came close to its lowest levels on Wednesday as investors received some positive news out of both the Eurozone and UK economies.

The Euro hit a one year high against the greenback following the President of the European Central Bank Mario Draghi’s comments, which some believe was market overreaction.

Today we have seen the rally move even further above the 1.29 mark (GBP/USD) following yesterday’s comments from the Bank of England Governor, Mark Carney.


The Euro achieved some great gains earlier in the week as Mario Draghi stated he believes stimulus might need to be toned down so it does not become more accommodative as the economy recovers.

Investors reacted in large to the comments and realized that the Eurozone is in a fairly good position to make such a move with a large current account balance. However, the US might not be and this could decrease the chances of further rate hikes this year.


Mark Carney surprised markets yesterday with comments that the central bank could hike rates this year on the back of a better performing economy. Furthermore he stated they may hike rates if business investment in the economy increased.

As a result of weaker US growth prospects and the Carney’s above comments, we find the Sterling trading at higher levels against the USD.


The Australian Dollar continues to post strong gains hitting a three-month high, mainly due to a weaker US Dollar and stronger commodity prices.

In the same way as many other markets, the Australian Dollar is also being driven by comments from Mario Draghi earlier in the week.

As a large exporter of iron ore, the Australian economy should receive great benefit after the recent iron ore rally gaining 4%.

Today the AUD is trading higher against most major currencies with the exception of the Sterling.


The Swiss Franc is largely considered a safe haven, many people choose to invest large amounts of their assets in this currency.

In order to control the value of the Swiss Franc, the Swiss National Bank (SNB) is printing large quantities of money and have an overnight repo rate of -0.75%. This means that there is a cost of just less than 1% per annum for owning CHF.

Today the SNB owns approximately $80 billion in US stocks. Last Tuesday Chairman Thomas Jordan stated the monetary policy has to remain loose, allowing the SNB to be ready to intervene (if needed) to control this overvalued currency.


The Rand traded slightly stronger against the Dollar in earlier trade today following yesterday’s losses. It traded weaker in comparison with other pairs such as the GBP, EUR and AUD.

The Rand faces uncertain days ahead from a mixed global environment. While some of the losses experienced from news out of the Eurozone have reversed, the Euro is still in a strong position.

Other global currencies including the GBP and CAD have weighed down on the ZAR after both central banks signaled they would be looking to hike rates in the coming months.

On the local front, Payment Protection Insurance (PPI) data is out a bit later today with the broader market expectation at 4.9% for May 2017 compared to 4.6% in April 2017.


The Naira depreciated against the Dollar this week mainly due to low Dollar supply, resulting from the holidays on Monday and Tuesday.

We also saw more intervention from the Nigerian Central Bank by injecting U$195 million into the market in order to boost Dollar supply.

The inflation rate is dropping with figures down from 17.24% at the end of April to 16.25%, This encouraged comments from the Central Bank of Nigeria, who stated that they are upbeat about the Naira improving in coming months.

Exchange4free Global Forex Report (21/06/2017)
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