The strongest currency against it’s peers is the GBP. The weakest is the AUD and the NZD after the semi-surprise cut in rates by the RBA dragged the commodity currencies lower.
The strongest and weakest currencies for Feb 3rd (a snapshot)
The GBP benefited the most from the moves lower in the commodity currencies (i.e., NZD, AUD and CAD) as they collectively were weaker. The semi surprise cut in rates by the RBA, sent the AUD sharply lower. The NZD was also dragged lower as traders start to anticipate that the RBNZ might be a central bank that will next join the currency war stimulus (rightly or wrongly).
The GBP – along with the USD – are thought to be the only countries that have a shot to raise rates in 2015. This should fundamentally keep them the favored currencies over time, should that fundamental strength continue in each country. The UK does have a May election, however, which can cause some anxiety. For today though, the favored currency is the GBP.
Having said that, the USD is weaker against all the major currencies with the exception of the CAD, NZD and AUD. The ISM data yesterday was weaker than expectations. Today, ISM NY Index, factory orders, IBD/TIPP economic optimism and car sales will be the fundamental news influences.
PS. the dairy price data will be released today out of New Zealand
