Pound sterling in strong advance versus Australian, New Zealand dollars + South African Rand
The British pound (GBP) has maintained a bullish tone through the course of Thursday's trading session after overcoming a blip in the wake of today's retail sales release.
A look at the GBP / commodity currency pairs shows the pound to be 0.73 pct up against the Aus dollar at 1.7283, up 0.53 pct against the New Zealand dollar at 1.9481.
The sterling rand exchange rate is meanwhile 0.7 pct higher at 16.6529.
Please keep in mind all quotations here are inter-bank spot rates. Your retail rate will be delivered with a spread being subtracted by your bank at their discretion. This is a competitive market though and the good news is that an independent FX provider will seek to beat your bank's rate, thus delivering up to 5% more FX. Please learn more here.
The commodity currencies have been weighed down by a broadly stronger USD and negative domestic media stories.
The Australian dollar has been under pressure throughout the day, In economic news, Australia releases failed to impress, as Wage Price Index and New Motor Vehicle Sales posted weak readings.
The Australian dollar remains soft across the board and has lost around 200 points against the US currency in the past week.
Also causing concern for the Australian dollar were comments from RBA member Ridout who today took aim at the still historically highly-valued currency in a speech today:
"As we transition to a more diversified economic base, the dollar where it is at the moment is very challenging and it is turbo-charging a very high cost structure in Australia and putting a lot of stress on things."
Ridout says that should the AUD remain strong for an extended period it is likely to be damaging and cause a restructuring of the Australian economy "of quite substantial magnitude."
Nevertheless, the brave could see an entry point here. According to Matt Weller at GFT traders could consider buying AUD as it appears oversold:
"The AUD/USD had an eventful past 24 hours, with rates bouncing into the upper-.9300s before returning back to test key previous support around .9300 again. As we discussed yesterday, more aggressive traders could consider near-term buy trades off this support level, but a tight stop below the week’s low would be essential because a break through this floor would open the door for more weakness ahead of the weekend."
The NZ Dollar fell on a similar theme to that of the AUD when the Financial Stability Report said the strong NZD poses a risk to the economy.
However, for the NZD the weakness may be temporary.
"The kiwi may be pressured in short term on dollar’s broad-based strength, but downside may be limited due to the upbeat NZ economy and the expectation of rate hike by RBNZ in Q1 2014," says an analysis from Citibank.
Meanwhile, an Evening Star formation on the NZD charts may also be to blame for today's losses:
"The NZD/USD surged higher in sync with its antipodean brother yesterday before stalling out and dipping back toward yesterday’s lows.
"The unit put in a large, clear Evening Star formation on the 4hr chart over today’s Asian session trade; this relatively rare 3-candle reversal formation is often seen at near-term tops in the market and suggests that rates could tick back down to test key .8200 support later today."
The Rand is meanwhile lower in sympathy with the rest of the complex - we cannot at this stage look a ZAR without considering the likes of AUD, NZD and CAD; the the notion that Janet Yellen could lay a clearer timetable for the advent of tapering in the US the commodity currencies have suffered as investors seek to bring back money invested in these high-yielding economies.