A report from the US based Institute for Supply Management (ISM) released yesterday Monday 1 July 2013 showed higher than expected numbers for the rate of growth in US manufacturing, increasing levels of confidence in the recovering American economy. This figures in the report showed a three month high in US manufacturing, thus moving the US over the break line for positive growth direction.
Elsewhere, Japanese manufacturers have expressed increasing levels of confidence due to a government led program to address many of the labor and inflation concerns, despite recent volatility in the stock market. For their part, both UK and Eurozone manufacturing numbers have continued to rise quickly, perhaps indicating signs of a recovery in the hard hit economies.
Analysts believe that the USD will continue to benefit from the string of positive economic reports such as this, strengthening it in other pairings against other major currencies.
Aussie Dollar Stymied by RBA Policy Makers
Despite significant gains against rival currency pairings on Monday 1 July 2013, the AUD is likely to hit a number of obstacles as officials from the Reserve Bank of Australia (RBA) made statements indicating that they intend to continue a conservative path of intervention to guard against risk.
The announcement out of the RBA came on 2 July, indicating that policy makers intend to maintain the current interest rates of 2.75%, with possible measures aimed at further depreciation in the future. In reaction, the AUD suffered losses to the USD in early trading, despite its impressive gains against the Yen the previous day.
Analysts believe that while the RBA continues its light handed strategy, the AUD is likely to lose value against competitive pairings.
Announcement of BoE Interest Rates Unlikely to Affect GBP
The Bank of England (BoE) is scheduled to declare its guidelines for key interest rates following a meeting at 1100 UTC on Thursday 4 July 2013. Current forecasts have indicated that the current rates are likely to be maintained for the month of July, thus having minimal impact on the GBP in its pairings against other currencies.
Analysts note however that news regarding the decision on projected Asset Purchase Targets by the BoE which is expected to be announced simultaneously may in fact have an influence the GBP.