Singapore Dollar Was Revaluated

The Singapore dollar experienced the unexpected surge as the government revaluated the currency after the forecast about the widening economy and the increasing inflation.

This decision reflects the broader trend for the Asian countries to shift their attention and resources from the economic stimulation to the containment of the inflation as the prices for the commodities rise. The decision may also signal about the policy maker’s belief that China is going to let its currency float, ending the yuan’s peg to the dollar. The Monetary Authority of Singapore stated that it plans the wider range of the currency’s fluctuations and the modest and gradual appreciation.

USD/SGD traded at 1.3762 as of 10:00 GMT today down from the opening price of 1.392. EUR/SGD traded near 1.8773, dropping from the opening price of 1.8955.

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Euro’s Recovery Was Short-Lived, Further Declines Expected

The euro’s recovery proved to be short-lived as was signaled by the euro’s decline today against U.S. dollar and other most traded currencies; the speculation suggests that that the central bank will keep the interest rates at the current record low level, causing concern for the performance of the common European currency.

The European Central Bank may keep the main refinancing rate at 1 percent to help the struggling European economies, causing speculation that the euro will continue its decline against the dollar as the Federal Reserve is going to raise the interest rates. Ireland, Greece and Spain have worst budget deficits: 14.3 percent, 13.6 percent and 11.2 percent of gross domestic product respectively, compared to the EU target of 3 percent.

The rescue plan may bring some short-term support for the euro. Yet the analysts think that in the long term the rescue may cost too much for the EU and bears too many negative effects and complications. The forecasts for the euro’s price range from $1.20 to $1.35.

EUR/USD traded at 1.2726 as of 17:39 GMT today after opening at 1.2784. EUR/JPY traded near 118.35 down from the opening rate of 119.26. EUR/CAD traded at about 1.2945.

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Sterling Drops on Consumer Confidence and Budget Cuts

The Great Britain pound fell today against othermost-traded currencies as the consumer confidence hasn’t recovered after it tumbled in March and on the concern that the budget cuts, planned by the new government, may curb the economy’s growth.

Nationwide Building Society’s consumer confidence indexrose by one point to 74 in April, while it previously had sank to 73 points in March from 83 the month earlier. The budget deficit was at the record level of 166.5 billion pounds in the previous year and predicted to be 163 billion pounds (11.1 percent of gross domestic product) this fiscal year.

George Osborne, the Chancellor of the Exchequer, voiced his opinion about the coalition and the future of the Britain’s economy:

We’ve got a coalition agreement that commits us to significantly accelerating the reduction in the structural deficit. There’s lots of work ahead. We’ve got a very difficult economic situation.

GBP/USD traded today near 1.4592 as of 21:23 GMT after it opened at 1.4823. EUR/GBP traded at about 0.8577 up from its opening level of 0.8509.

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Rising Employment Value Strengthens Aussie

The Australian dollar gained against its U.S. counterpart and rose versus the euro after the government reported that the number of people employed in Australia increased more than expected.

The employers added 33,700 (0.3%) to 11,025,500 jobs in April. This report sparked the speculations that the Reserve Bank of Australia will continue to increase the interest rates on order to keep the inflation in check. The central bank has raised the benchmark rate six times since October and may increase its benchmark rate by 54 basis points over the next 12 months, as some economists say.

The growing number of employed people shows that Australia hadn’t met such difficulties to its economy like some other developed countries. Philip Lowe, the Assistant Governor at the RBA said: “A major challenge will be to expand the supply side of the economy so that demand can grow solidly without adding to inflation.”

AUD/USD rose to 0.8990 as of 17:10 GMT today from its opening price of 0.8932. EUR/AUD dropped to about 1.3982 from the opening level of 1.4115.

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Rand Weakened by Concerns for Demand & Interest Rates

The South African rand weakened today amid the concerns that the fiscal crisis in the European Union will afflict the pace of the global economic recovery, damping the demand for the riskier assets.

The rand also weakened on the uncertainty as to whether the central bank is going to keep the interest rates at the current level. The bank already has cut its main rate seven times since December 2008 to aid the country’s economy with the recovery from the recession and to boost consumer spending. The South African exporters and labor unions demand to decrease the rates in order to depreciate the currency, which they consider to be overvalued.

USD/ZAR rose today to 7.511 as of 9:40 GMT from the opening level of 7.450.

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Industrial Expansion Aids Mexican Peso

The Mexican peso gained today as the industrial production expanded more than expected signaling about the increasing pace of Mexico’s economic recovery.

The industrial production in Mexico expanded 7.6 percent in March from the previous year. This added confidence in the currency of the country, which economic recovery was a bit slow recently. The yield on Mexican 10 percent peso bond maturing in 2024 dropped 0.04 percentage point to 7.64 percent.

USD/MXN traded at about 12.3355 as of 08:36 GMT today down from the opening price of 12.3360.

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Rising Global Stocks Push Loonie Up

The Canadian dollar extended its advance against the U.S. currency today for the fourth straight day as the rising global equities increased the appeal of the currencies tied to the economic growth.

The Standard & Poor’s 500 Index rose by 1.4 percent today and the S&P/TSX Composite Index increased 1.6 percent. The Canadian currency is supported by the expectation that the Bank of Canada will raise the interest rates as soon as June 1st, making Canada the first country among the Group of Seven Nations to raise its interest rates.

The experts remain bullish on the loonie as Canada looks like robustcommodity-producing country with the strong recovering economy. According to the experts the Canadian dollar is heading toward $0.9931 price.

USD/CAD reached 1.0193 as of 21:38 GMT today, falling from its opening level of 1.0216. EUR/CAD dropped to about 1.2870 from its opening price of 1.2935.

Swiss Franc at Record High Level Against Euro

The Swiss franc performed the huge leap against the euro today and rose against the U.S. dollar on the speculation that the Swiss National Bank will stop to contain the currency’s appreciation.

In the previous month the currency was falling against the greenback and remained at approximately the same level against the euro. The SNB tried to prevent the appreciation of the frank in an attempt to contain deflation and to help the recovery of the nation’s economy. But now the economists start talking about the possible relaxation of the central bank’s control of the currency.

The experts say that the advance of the franc against the euro is quiet natural. It’s just required that the SNB wouldn’t stand in the way and let the markets do their job.

EUR/CHF dopped to about 1.4011 today as of 18:41 GMT after opening at 1.4326. USD/CHF fell to 1.1106 from the opening level of 1.1180.

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Loonie Declined with Increasing Demand for Safety

The Canadian dollar dropped today against its U.S. counterpart to the lowest level in more than a month as the commodities and the global equities were affected by the concern about the European debt crisis.

The doubts that the aid from the European Union will improve the situation in Greece and in the Euro zone in general drove the sentiment toward the risk aversion. Such pessimistic mood in turn influenced the commodity prices and the stocks, which fell and, as a result, caused decline of the currencies related to the economic growth.

The desire for the safety helped the greenback to go up. Yet the analysts say that the fundamentals are favorable for the Loonie and the currency may still reach parity with the U.S. dollar. The Canadian dollar last time traded at parity with the greenback in April 27th.

USD/CAD reached 1.0246 today as of 20:52 GMT after opening at 1.0107. CAD/JPY dropped to about 92.22 down from the opening rate of 93.50. GBP/CAD traded near 1.5518.

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Mexican Peso Drops as Crude Oil Tumbles

The Mexican peso tumbled today against the U.S. dollar as crude oil declined, dragging along with it the currencies tied to commodities, and with increasing global risk aversion sentiment.

Mexico, being the second biggest supplier of crude oil in the world, greatly depends on oil prices, which dropped 4 percent to $82.74 a barrel today on NYMEX. The budget deficit problems in Europe negatively affect the global risk sentiment, also weakening the peso.

USD/MXN traded near 12.5998 as of 11:19 GMT today up from the opening price of 12.5316.

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New Zealand Dollar Rise with Improving Jobless Rate

The New Zealand dollar strengthened today after the jobless rate improved and Alan Bollard, governor of the Reserve Bank of New Zealand, suggested that the central bank may increase the interest rates as the economy become “less fragile”.

New Zealand’s jobless rate fell to 6 percent in the first quarter, compared to 7.1 percent in the previous three months, the lowest level since 1986. Bollard declared that:

Financial markets currently expect the Reserve Bank to begin raising the official cash rate around the middle of the year and continue to do this in small steps for some time. This is broadly in line with our current views.

NZD/USD traded near 0.7253 today as of 10:11 GMT up from its opening rate of 0.7171.

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