Forex News
Pound Pares Losses After Exaggerated Rally

Great Britain poundThe pound reverted its losing trend from last week’s end, specially versus the euro, as traders interpreted the winning streak as inadequate, as U.K. could be starting its first signs of economic recovery.

The pound has been facing extreme volatility as investors remain confused regarding the directions it may take in currency markets, considering the actual conjecture of the British financial scenario. Today, the pound rose specially versus the euro, as even if the U.K. posted negative growth numbers last week, analysts suggest that next quarter will bring back optimism towards the United Kingdom’s economy.

EUR/GBP traded at 0.9109 as of 21:45 GMT from a previous rate of 0.9235 yesterday.

The Brazilian real, ranking among the best performers in currency markets this year with the Australian and New Zealand dollar, experienced another day of losses as the government may take further action to halt the current national currency rally.

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The Brazilian real suffered another day of pessimism as speculations suggest that the national central bank could be ready to take further measures, after setting a tax for international capital inflows towards Brazilian equities markets last week, declining attractiveness for the real as fears that a good currency performance may be once synthetically halted by policy makers.

USD/BRL traded at 1.7205 as of 21:25 GMT from an opening rate of 1.7178 today.

If you want to comment on the Brazilian real’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Canadian currency, which even flirted with parity towards its U.S. counterpart, declined once again today reaching the lowest levels since the beginning of the month, as stocks and commodities impacted the loonie’s attractiveness in a negative way.

The loonie is being a victim of its national central bank policies since it stated that a strong currency could stop plans of an economic recovery in the country, influencing traders’ perception towards the Canadian currency as the Bank of Canada may intervene in its currency performance, automatically creating a negative sentiment, which gained force today as such declarations were repeated. A part from BOC comments regarding a strong loonie, financial markets did not provide support for Canada’s currency to grow, considering the nation’s exporter profile that lost attractiveness as stocks and commodities, specially the crude oil, underperformed today.

According to analysts, two factors, which are not related, pushed the Canadian dollar away from parity with its U.S. counterpart, as the greenback gained since its rates could be undervalued, and the sentiment towards the loonie is becoming progressively pessimist, as investors are option for other high-yielding options in countries where a strong currency is being tolerated, like Australia, leaving the loonie in a second plan for most of traders.

USD/CAD traded at 1.0685 as of 21:04 GMT from a previous rate of 1.0518 yesterday. CAD/JPY traded at 86.20 falling from 87.55 yesterday.

If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.
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The dollar had the best performance in more than a month this Monday as speculations suggested that the current rate, mainly versus the euro, would be to low to sustain, making the greenback to erase much of the losses it posted last week versus the European common currency.

The U.S. dollar gained versus several major currencies which touched record highs due to increased risk appetite that has been affecting the dollar’s attractiveness in foreign-exchange markets during the past few months, as the world economy finally showed signs of improvements. Currencies like the Australian dollar and its New Zealand counterpart, posted the biggest losses versus the greenback as investors understood that current levels for these currencies would not reflect their trends versus the U.S. dollar, as the North American currency is also improving systematically, even if to a lesser extent than currencies from commodity exporting nations. The South Korean won, even if being an emergent market currency, extended gains as its economy grew sharply in the last quarter, according to a report.

According to analysts, the situation for the greenback is rather different than when it touched $1.60 versus the euro last year, and traders are questioning themselves about fundamental factors behind the current rates for the greenback, helping the North American currency to regain space in currency markets, as the euro could be overpriced.

EUR/USD traded at 1.4871 as of 20:38 GMT from a previous rate of 1.5013 yesterday. AUD/USD traded at 0.9155 from 0.9256.

If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.