The British Pound continues its rocky decline
Britain’s currency continued on its rocky decline, across the Atlantic, Canada’s dollar rose for the eighth consecutive day, the currencies longest streak in over five and half years, as gains in both stocks and persistent strength in commodity prices pushed investors into currencies tied to economic growth. Yesterday, the Loonie reached its strongest level in over seven weeks, as crude oil, the nation’s biggest export, traded above $80 a barrel for a fifth consecutive session. The Canadian currency strengthened 0.3% against the neighboring U.s currency, hitting to 1.0240, its strongest value since January 15th.
Another one of Britain’s former colonies, Australia, continued to produce positive signs of recovery as consumer confidence edged higher this month, a sign that households are weathering the central bank’s decision to raise borrowing costs last week for the fourth time in five meetings. Yesterday, the Westpac Banking Corp. released its consumer confidence sentiment- Survey of about 1,200 consumers which asks respondents to rate the relative level of past and future economic conditions, employment, and climate for major purchases. The sentiment index gained 0.2% to 117.3 points. The survey was conducted during the same week that the RBA raised the benchmark lending rate by a 0.25bps to 4%, adding to similar to moves made in December, November and October of last year. According to central bank officials, Australia’s economy is likely to expand at or above its average pace over the next few years, boosted by rising employment and investment spending by resources companies. Yesterday, the AUD/USD continued its bullish trend- rising 0.718% over the course of the day to close at 0.91516.
While consumers continue to shrug off the recent string of interest rate hike, rising borrowing costs continue to hurt the housing market as home loans fell the most in nearly eight years in January. The Australian Bureau of Statistics reported that the number of home loans plummeted by 7.9%, the biggest fall since June 2000, after the phasing out of last year’s first-home buyers’ grant boost and interest rate rises sapped demand. This unexpected fall marks the fourth decline in housing finances since the RBA commenced tightening its monetary policy. The Australian Bureau of Statistics reported that January’s disappointing result follows a revised 5.1% drop in December- the market had predicted 2% increase in January.
At half past midnight tonight Australia will release its Unemployment Rate for February. Unlike some of the other developed nations, Australia’s Unemployment is well within the single digits and has been steadily decreasing. Last month, Australian employment beat expectations for four months in a row, rising by 52,700, more than three times the expected number. As a result, the unemployment rate slipped to 5.3%, the lowest in a year. This time the forex online market predicts that the jobless rate will hold steady at 5.3%, after employment change is predicted to increase by 15.3K for February.
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