In a follow up to yesterday’s discussion on the falling price of oil in the market, the Canadian currency is reported to be feeling the sting of the decline, nearing a two-week low against the USD. Analysts remind readers that oil is the northern country’s largest export, thus shifts in price significantly affecting the national economic situation.
Analysts continue to believe that the energy market is likely to fluctuate considerably over the course of the coming month. Dwindling stockpiles in the US, a major consumer of Canadian fuel, may push up demand, thus raising prices and helping to increase the value of the loonie. Stability in the Middle Eastern producers such as Libya and Iraq can also influence the availability of crude, further lowering supplies and creating shortages in the market.
Moreover, the loonie has dropped ahead of reports on unemployment, which are expect to show that less jobs were added in July than had previously hoped.
Analysts advise investors to proceed with caution on both the Canadian dollar as well as on crude in the coming month due to probable volatility in the market.
Aussie Falls Ahead of Report on Jobs
The Australian dollar was reported to have taken a hit on 7 August 2013 in the lead up to the issuance of the jobs numbers for the month of July. Despite a slight set of gains that were discussed in yesterday’s analysis, the Aussie remains unstable. Moreover, many experts are expecting that unemployment is likely to rise, with fewer jobs added in July than the previous month.
Analysts advise traders to proceed carefully in their dealings with the Aussie in coming weeks as the release of the report is likely to lead to a further devaluation of the AUD, despite some of the intended efforts by the country’s Reserve Bank to stem the decline of their currency through the tightening of their monetary policy.
ECB to Release Monthly Report
The European Central Bank is expected to release its monthly statement tomorrow 8 August 2013, hopefully providing observers with a clearer picture of both the economic health of the monetary union and on how it intends to proceed forward with its recovery efforts to improve the economy.
Analysts remind readers that the Euro has faced continued difficulties in its trading against many of its rival currencies, including the USD. That said, the ECB recently declared that interest rates will remain static, and encouraging news regarding employment in Germany, a major player in European manufacturing, was released last week, leading many to raise their hopes on the Continent. Additionally, many observers may be looking to the report for some signs on how the central bank intends to deal with the fiscal turmoil in the southern states like Greece, Portugal, and Spain.
Investors are advised to exercise caution in trading with the Euro as the markets may display rapid shifts in response to any perceived changes emanating from the monthly statement.