Ahead of the release of the UK’s Mortgage Approvals numbers the Pound was trending in a slightly softer position against the US Dollar but up over 0.5% against the Euro. The GBP/EUR pairing briefly advanced to a high of 1.42 in response to the latest developments in Greece but fell back below that level as trading continued. If the number of mortgage approvals issued increases as expected, the Pound could climb in the hours ahead.
The common currency plummeted against a number of its peers as the Asian session opened to the news that Greece had to call an emergency bank holiday and impose capital controls due to inadequate funding. As well as dropping to its lowest level of the year so far against the Pound, the Euro lost 0.8% against the US Dollar and 0.6% against the Australian Dollar. Today’s Eurozone sentiment gauges and German inflation numbers could be responsible for further Euro movement in the hours ahead.
With Federal Reserve interest rate hike bets continuing to dictate demand for the US Dollar, investors will be looking ahead to the week’s most influential US ecostats, including the nation’s Consumer Confidence, ISM Manufacturing and Non-Farm Payrolls reports. Results which keep hopes of a September rate adjustment alive would keep the ‘Greenback’ bolstered.
As the dire situation in Greece triggered a bout of risk-aversion, the Australian Dollar fell to a fresh 71-month low against the Pound before stabilising during the European session. The AUD exchange rate may fluctuate overnight in response to Australia’s Consumer Confidence, New Home Sales and Private Sector Credit reports.
New Zealand Dollar
The New Zealand Dollar remained close to a five-year low against the Pound as markets reopened for a fresh week of trading. The odds of the Reserve Bank of New Zealand cutting borrowing costs further in the next few months could rise if the week’s domestic reports, including the upcoming building permit number and NBNZ Business Confidence index, point at weaknesses in the South Pacific economy.