On the continent, the Euro also suffered mildly off the back of reduced confidence statistics from the ZEW survey, despite rumours of a post-crunch interest hike from the ECB. Positive results regarding Italy’s current account have had minimal impact. Yesterday’s high performer was the Australian Dollar, primarily as a result of sustained export strength; in fact, as the minutes of the most recent RBA meeting reveal, such strength had even tempted the bank’s committee to raise interest rates beyond the current record high.
Looking ahead, there are more reports expected from Europe today, with the results of an assessment on business climate (IFO Index) just in higher than expected at 103.5. Here in the UK, the anticipation of the BoE minutes is over and as expected the committee voted 8-1 to keep rates on hold, with the dovish Blanchflower the only one voting in favour of a cut.
Across the Atlantic, the US Dollar could be subjected to further fluctuation as the Federal Open Market Committee releases minutes from its recent meeting as well; these should go some way to revealing how justifiable recent resurgence in consumer confidence is. Naturally, evidence of any push for a further rate cut will most probably promote speculation of a further injection in growth. The Canadian Dollar looks set for a big day as well, with the Consumer Price Index being released later this morning. Despite the USD’s volatility south of the border, the Loony is predicted to remain stable, with analysts expecting little change to the CPI.
Over the long term, the greenback could well slip further; the seemingly unstoppable rise in crude oil prices, combined with the ongoing unravelling of the housing market (which seems to have spread beyond the subprime sector), will serve to put further downward pressure on the ailing currency.