Posted February 02, 2010
The UK pound fell against the euro and the US dollar as the recovery pace creeps along. The South African rand strengthened against the US dollar. The South African rand rose against the US dollar as commodity prices increase. The Canadian dollar rose against the US dollar as oil and commodity prices climbed. The Australian dollar weakened to 88.21 US cents as the Reserve Bank of Australia keeps interest rates the same. Poland is on track to join the EU in the year 2014.
The UK pound fell against the euro to 87.43 pence per euro. It also weakened against the US dollar to $1.5950.
New data coming from the UK shows a continuing economic improvement but it is slower than anticipated. The construction index rose in December from 47.1 to 48.6. The increase is actually more than the Chartered Institute of Purchasing and Supply expected according to a statement, but the pace does not justify a continuing stronger pound.
The pound reversed some of the gains it earned last week. Housing in the UK, like in the United States has slowed after showing signs of improving. House price growth in the UK was at .7 percent in January.
The US dollar strengthened again against the euro to $1.3938. The dollar also rose against the yen to 90.47 yen.
The Japanese yen was at 126.04 yen per euro.
The South African rand rose against the US dollar to 7.4458 rand per dollar. The rand is benefitting from strong gold prices. Gold is at $1,116.68 an ounce. The rand is commodity based and rising commodity prices in general are benefitting the currency.
Platinum prices, like gold prices, are rising. Platinum has reached $1,561.5 per ounce As the US dollar remains weak, commodities are being helped which means the rand will continue to strengthen for the time being.
The Canadian dollar has also risen against the US dollar to C$1.0606. The loonie is commodity based like the South African rand and as commodity and oil prices rise, the loonie strengthens. Crude oil has gone over $75 a barrel again and is currently at $75.12. Raw materials and oil account for over half of Canada’s exports.
The Australian dollar weakened against most global currencies after the Reserve Bank of Australia kept interest rates at 3.75 percent. Analysts were almost unanimous in their belief the bank was going to raise rates so the move to keep rates the same came as a surprise.
Investors moved their money quickly into other higher yielding assets including the South African rand. The Aussie weakened to 88.21 US cents.
Australia was one of the first countries to raise interest rates among the Group of 20 nations. In fact the rates have been raised three times already. Analysts are clearly puzzled by the decision to keep interest rates the same.
The European Central Bank meets this week and is expected to keep the benchmark interest rate the same.
The Brazil real rose against the US dollar to 1.8424 real per dollar.
Poland wants to join the European Union and has been set back by the recession which created a budget deficit and led to excessive debt. But the government is working diligently to improve its financial condition. The European Union has a set of rules countries must meet before allowed to join. Poland’s government has instituted a plan to reduce the public debt and the debt.
Current expectations are that Poland will be able to join the European Union in 2014.