GBP AUD And GBP NZD Exchange Rates Claw Back Lost Ground In Spite Of Positive Michigan Confidence Survey

Modified: Sunday, 17 February 2013 14:33 BST - Written by Frank Davies

STORY LINK GBP AUD And GBP NZD Exchange Rates Claw Back Lost Ground In Spite Of Positive Michigan Confidence Survey

Friday afternoon’s Michigan Sentiment survey revealed that confidence levels amongst economic participants in the US has risen to its highest level for some three months. The release helped to ensure that global appetite for risk ended the week on an uptick; investor sentiment had taken a hit earlier in the week, when Q4 GDP data from Japan and the whole of the eurozone revealed an alarming dip in economic activity in both economies at the end of last year.

Thursday’s tame GDP data from Europe and the Far East didn’t stop the go-ahead New Zealand Dollar from powering to its highest level against the Pound for many years. The flight to safety which the data triggered also failed to stop the Australian Dollar gaining against Sterling – the Pound Australian Dollar exchange rate edged below the 1.5000 level on Thursday, before rebounding on Friday. The downward moves for GBP AUD and GBP NZD amidst a generally ‘risk off’ trading environment provided a stark illustration of the current unwillingness of investors to hold GBP-denominated assets.

Looking ahead to today’s session, a light data schedule means that comments from central bankers and policy makers will be closely heeded by investors looking for a steer on the world’s major currency pairs. This morning’s whole of eurozone current account data isn’t normally judged to be a tier one data release, however given the relative paucity of economic figures on offer on the day, it is set to carry more significance than would ordinarily be the case. Analysts will be looking for something approaching November’s highly respectable showing of €19.8bn for an indication that the economic slowdown in the eurozone during final three months of 2012 was nothing more than a temporary downside blip.

A disappointing showing for December’s European trade balance numbers could trigger a move against the single currency. Given that GBP EUR was trading above the 1.1800 level as recently as a week ago, such an outcome could easily push the pair back up towards this level once more.

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