US Dollar Canadian Dollar Exchange Rate Forecast To Weaken, Australian to New Zealand Dollar Predicted To Gain

Modified: Monday, 13 January 2014 14:29 BST - Written by David Woodsmith

STORY LINK US Dollar Canadian Dollar Exchange Rate Forecast To Weaken, Australian to New Zealand Dollar Predicted To Gain

Friday afternoon’s US jobs data had a profound effect on price action in the global currency markets. The headline Non-Farm Payroll number, which measured job creation in the world’s number one economy last month, came out well below expectations to print at 74,000 versus analysts’ predictions of a showing of 197,000.

However, the American labour market figures proved to be a curate’s egg, with December’s overall unemployment numbers, published at the same time, showing a plunge in the total number of joblessness in the States to 6.7%, down from November’s counterpart result of 7.0%.

The mixed messages sent out by the US jobs numbers caused analysts to alter their short to medium term predictions for several of the global economies major currencies – we take at look at the shift in market sentiment below –

Prior to Friday’s domestic labour market numbers, most investors had forecast that the US DOLLAR would start strengthening against the other majors sooner rather than later with many predicting that a corner had already been turned for the Buck. However, the tame job creation figure caused a re-think, leading market participants to factor-in a higher percentage chance that the next trimming of Quantitative Easing by the Federal Reserve might be a long way off. The shift out of the Greenback sent the pound Dollar exchange rate up to within touching distance of its multi-month high at 1.6517 GBP/USD on Friday afternoon. The Buck is now forest to trade with a NEUTRAL TO NEGATIVE bias moving forward.

Perhaps the biggest loser from the US jobs data was the CANADIAN DOLLAR (currency: CAD). The fact that the disappointing American job generation numbers was accompanied by a horrendous set of Canadian employment figures for December added insult to injury, sending GBP CAD up to 1.8037 before the weekend close. This represented the pair’s highest trading rate since September 2009 and the outlook for the Loonie is now NEGATIVE.

The AUSTRALIAN (currency:AUD) and NEW ZEALAND DOLLARS (currency:NZD) enjoyed strong support following the US employment numbers which sent Pound Australian Dollar exchange rate and Pound New Zealand Dollar exchange rate down to 1.8301 GBP/AUD and 1.9836 GBP/NZD during late trading on Friday. Price action for these two Commodity Dollars suggests that investors have taken the US data as a sign that the Fed’s QE programme is here to stay – for the time-being at least. The Antipodean sister currencies are new expected to trade on a NEUTRAL TO POSITIVE footing in the near term.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Australian Dollar Forecasts Canadian Dolla Forecasts