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Exchange4free Global Forex Report (31/01/2018)


The US Dollar has recovered over the past week, regaining some of it strength against major currencies. On Tuesday, the EUR/USD reached a weekly high of 1.2430, despite the less than encouraging data released by the EuroZone.

The Greenback strengthened after US Treasury Secretary, Robert Mnuchin, announced that a strong US Dollar is in the long-term interest of the United States.

Fourth Quarter growth in the US came in at 2.6%, 0.4% less than the expected 3%. The GDP data has not had the best impact on the Dollar, but President Donald Trump, has managed to regain investor and consumer confidence after his speech at Davos.

Speculators and analyst report that the Dollar remains volatile in the short-term, due to politics and policies, but they believe the Dollar will regain its strength over the long-term. Currently the EUR/USD is trading around 1.244, compared to 1.239 last week.


Over the past week the EUR/USD pair traded back and forth around the 1.24 mark due to investor caution surrounding upcoming economic events in the EuroZone and the United States.

On Tuesday the EUR/USD pair fell to a low of 1.2334, but gained some ground during the day and closed at 1.2450. Speculators believe that the EUR/USD pair’s recovery on the day was mainly due to the EuroZone fourth quarter GDP estimates, remaining unchanged, and the announcement by the US Treasury Secretary (Robert Mnuchin) that the the US has no problem with a weak Dollar.  


In Tuesday’s session the Sterling lost some ground against the Dollar, sliding to 1.4150 GBP/USD. The drop in the GBP/USD was the result of a slight Dollar recovery. Currently the pair is trading around 1.4172, up 0.15% from Tuesday .

The Sterling was also forced lower as pressure builds on the UK Prime Minister, Theresa May, with Brexit negotiations proving more difficult.

Despite the current GBP/USD position, analysts have faith that the Sterling will recover and will reach the predicted levels as long as economic upheaval regarding Brexit are kept to a minimum.


On Tuesday, the Australian Dollar dropped to 0.8060 against the U.S Dollar, but regained some ground at the end of the session, closing at 0.8105.Speculators support an upward trend in the pair, with expectations of the pair reaching 0.8100.

Official Consumer Price Index (CPI) data was released on Tuesday this week; up 0.6% for the last quarter of 2017 bringing the annualised gain to 1.9%. Market expectations were at 0.7% and 2% respectively.

The Australian Dollar dipped slightly on the release of the news but managed to claw back most of the losses relatively quickly.


The Swiss Franc lost some ground against the Euro this week as rumours of maintaining intervention as a policy came into play. The EUR/CHF pair was trading at 1.1608 on Tuesday, compared to 1.1618 on Monday.

Speculators expect the value of the CHF/ EUR to dip even lower over time as risk appetite remains strong and markets assume that the Quantitative Easing programme is nearing its end.This statement  is evident when looking at the current trading rate of the pair. The EUR/CHF pair is currently trading around 1.1591, down 0.74% from the previous day.


The future of the Rand looks positive amidst decisive political action, strong local fundamentals and a weaker Dollar. The Rand has gained 15% against the US Dollar since November 2017, levels that have not been reached since 2015. On Thursday the USD/ZAR pair was trading at a low of 11.80.

The recent strength in the Rand can be attributed to contributing factors such as rising commodity prices, a weak Dollar and bullish investor-sentiments. The CPI report released last week, showed that year-on-year inflation of 5.2%, which falls within inflation targets of 3-6%. The positive inflation data can be seen as another contributing factor to the strength in the Rand.

All these factors make a strong case for the strength in the Rand, but South-Africa is still on shaky grounds as it awaits February's Budget Speech. The Rand is expected to remain firmly between 11.80 and 12.05 in the coming weeks. The USD/ZAR is currently trading around 11.889.


The Naira gained some ground against the US Dollar, appreciating to 359 on Monday from 360 last week Monday. The appreciation in the Naira is the result of a weak US Dollar demand as importers and businesses have not been buying foreign exchange.

The Central Bank of Nigeria has been flooding the market with Dollars, which means that speculators are no longer hoarding forex and caused the Naira to appreciate. Currently the USD/NGN pair is trading around 361.01, down 0.27% from Tuesday.

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