Exchange Rate Forecasts: Australian, New Zealand Dollar & Rand To Tumble From Today's Exchange Rate Levels

August 6, 2014 - Written by John Cameron

STORY LINK Exchange Rate Forecasts: Australian, New Zealand Dollar & Rand To Tumble From Today's Exchange Rate Levels

Currency News UK: Analysts Forecast that the Australian, New Zealand Dollar and South African Rand are set to Tumble From Today's Exchange Rate Levels - The middle part of yesterday’s US equities session saw a surprise move lower for the broad-ranging S&P 500 share index.

The headline share market dropped by 9 points within the space of the 5 minutes between 1830 and 1835hrs BST. There were no data releases at this time and although there are significant and fast-moving geo-political events unfurling this week in Gaza and beyond, there was no obvious driver behind the move.

The shift downwards sent the benchmark equities measure down through to its lowest level since the final week of May, adding to the impression amongst market participants that the world’s share markets may now have reached a top.

The movement for risk-driven currencies and the Commodity Dollars during after-hours trading in London appeared to re-affirm this, with the Pound Australian Dollar and Pound New Zealand Dollar exchange rates climbing to intraday highs of 1.8151 GBP/AUD and 1.9950 GBP/NZD respectively.

Meanwhile, the highest-yielding of the sixteen most-actively traded global currencies predictably shed a considerable mount of its value against the Pound Sterling; GBP ZAR had jumped to as high as 18.1811 having traded down into the low 17.9000 during the European session.

Analysts suggest that the downward shift in US equities prices yesterday evening may have represented a delayed reaction to the latest ISM survey of the services sector of the American economy, published yesterday afternoon, which revealed that activity levels in the combined tertiary industries of the world’s number one economy expanded at their fastest pace for nine years.

As has been the case with any positive US data release during recent weeks, the ISM gauge raised investors’ expectations regarding a near-term policy change from the Federal Reserve.

An increase in interest rates from the US central bank poses the greatest threat to the current Bull Run in equities markets which has lasted for some 64 months now. The highly positive ISM reading cancelled out the calming effect of Friday’s negative US jobs data which showed a surprise increase in the overall level of joblessness in the States.

Risk events driving the markets today are likely to include Industrial and Manufacturing Production numbers, due out shortly in the UK, along with the latest US Trade Balance data, penned for release this lunchtime.

This afternoon’s NIESR Gross Domestic Product Estimate, also set for publication in Britain, also has the potential to be market-moving; if it prints outside the expected level of 0.9%, then look for further market volatility.

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TAGS: Australian Dollar Forecasts Daily Currency Updates New Zea Forecasts