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Global Forex Report - 29 March 2016

USD

Monday’s data showed that U.S. consumer spending was weaker than expected. This, together with other data showing a widening in the goods trade deficit in February, indicates a slugging first quarter as far as economic growth is concerned. In the wake of the consumer spending and trade data, estimates for gross domestic product growth were reduced by as much as 0.5%. This led to a weakening of the USD against various currencies, and a marginal price increase for U.S government bonds.

Yellen is set to speak later today, and she could offer some clues as to what will happen in upcoming Fed meetings.

EUR

Statistics released by the ECB today (29/03) showed that approved loans rose 1.1% from a year ago, slightly faster than the growth of 0.8% in January. This is following ECB’s launch of various policy measures to stimulate the economy.

Growth in M3 stood at 5% in February, matching analysts’ expectations in a Wall Street Journal survey. The overall money supply is a key tool for the measurement of future inflation for the ECB.

GBP

Once more, the “Brexit” is on everyone’s mind when it comes to the UK and the GBP as investor’s eye a GBP/USD exchange rate of 1.3502 which is a drop of over 4.5% from the current rate. The prospect of a “Brexit” has seen the sterling fall more than any other major against the USD this year.

AUD

The AUD started the week strengthening against the USD on the back of weaker than expected U.S data. No key domestic data is being released this week, as such, the direction of the AUD will largely be dependent on investor sentiments.

CAD

The CAD is another currency that started the week on a positive note on the back of the U.S  trading data. Another key factor here was the recovery in the price of energy during the North American trading session. Canadian data is also scarce this week, with the employment report being pushed back to the 8th of April.

ZAR

Last week on Wednesday the latest inflation figures were released: Annual consumer price inflation was 7% in February 2016, up from 6.2% in January 2016. This is the highest rate since May 2009 when the rate was 8% and most economists believe there is still room for another two rate hikes this year. This has led to a 5.5% strengthening of the ZAR against the GBP for this year.

NGN

The Central Bank of Nigerian has unexpectedly raised interest rates to 12% just months after dropping it to 11% last November. Slow economic growth, increasing levels of inflation and the effects of low oil prices are likely key points in the decision to raise rates. The Central Bank of Nigeria also announced that it will increase the cash reserve requirements that banks hold to 22.5% (from 20%).

ZAR Forex Report - 29 March 2016
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