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Exchange4free Global Forex Report (30/03/2017)

USD

The USD rose to its highest level in over a week on Wednesday, as investors felt that the sell-off related to president Trump’s healthcare reform plans was overdone.

The dollar also got a boost from Chicago Fed. President Charles Evans, known for being one of the Fed’s more conservative members who generally supports lower interest rates, who said he was in line with most of his colleagues in supporting further rate hikes this year.

EUR

The Euro fell the most in five weeks on Wednesday, as the UK Brexit is set in motion by Theresa May. ECB officials admitted that they are cautious about changing their monetary-policy message before June.

Although many expected the GBP to be the biggest loser following the triggering of article 50, investors seem to be more concerned with the future of the Euro. They seem to be pricing in the likelihood that the EU is going into a period of uncertainty, after losing its first member.

GBP

With article 50 officially triggered, the GBP retains a positive bias against the Euro (for now). However, this is not the case when it comes to the GBP/USD pair.

The Sterling finds itself at session lows this morning and a break below the 1.24 mark remains a possibility.

The markets expect the EU to release its draft Brexit negotiation documents within this week, which will show us if the UK and EU are on the same wavelength when it comes to the Brexit. This could be a key factor in determining which way the GBP will go.

AUD

The AUD strengthened overnight across all major currencies and hit its high of the week, particularly against the Euro. The rise against the Euro is owed to a report by Reuters where sources within the ECB stated the markets had misinterpreted the bank. The foreign inflows into the equity market alongside a bounce in the commodity prices have been supporting the value of the AUD.

CHF

Swiss exports have been declining in the past year and in an attempt to support exports, the Swiss National Bank (SNB) has been intervening in the forex markets to weaken the CHF. However, research performed by SNB staffers revealed that the currency may not be as overvalued as previously believed. This information may provoke a revaluation of the currency which will provide support to those against the SNB manipulating the CHF lower. It was reported last week that CHF 67.1 billion was spent in 2016 in an attempt to weaken the currency against the Euro.

ZAR

The Rand firmed against majors on Thursday morning ahead of the SARB interest rate decision due later today, but the Rand remains vulnerable to the speculation surrounding Pravin Gordhan and an imminent cabinet reshuffle – which could see Gordhan replaced by former Eskom CEO Brian Molefe.

With Gordhan seen as a pillar of stability by investors, three of the ANC’s top six members are reportedly opposing President Zuma’s plans. Only time will tell as to whether the president pushes his plans through despite a clear lack of support from key members of his own party.

NGN

The CBN reduced the exchange rate to 362 (down from N399/USD) at which Bureau de change sells dollars to the public . This is the latest attempt by the Central Bank to lure consumers away from the black market. At the time of writing, the street market USD/NGN rate finds itself at 375.

Exchange4free Global Forex Report (15/03/2017)
Exchange4free Global Forex Report (04/04/2017)

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