The unfavourable results of the capital spending data for Australian private new capital caused the AUD to get weaker on Thursday.
AUD against the USD traded at 0.7223 which is lesser by 0.26%. NZD/USD pair changed upward at 0.6584 or 0.09% after it traded poorly. The USD/JPY pair declined at 0.12% at 122.60.
The Australian report on capital expenditure revealed that that for the 3rd quarter private capital expenditure dropped to 9.2%. The expected 3.0% dropped was way below the data provided.
In New Zealand, the report on trade balance for the month of October showed a shortfall of $963million NZD on a monthly basis and a $3.24billion on a yearly one. The data is a better one that has been expected by traders and investors.
The greenback index shows a decrease of 0.02% from previous numbers. The USD index measures how strong the currency is against some other global currencies.
Euro currency is at its lowest in several months after a report that the European Central Bank is going to widen the limits of the bond buying program or may implement a 2 level penalty charge for the banks that have money with ECB.
As the world awaits events happening with Russia and Turkey, Wall Street improved its performance on Tuesday. Trading was stable due to an increase in oil prices following the downing of a Russian war plane by Turkey that brought about concerns that oil production in the region will be affected.
The S&P 500 and the Dow gains were mostly on the materials and energy sectors. Crude oil jumped by 2.7% which was the highest one day gain in almost 3 weeks. A 2.2% increase in energy shares was also recorded. The indexes were low early Tuesday since investors were unsure of the hodgepodge of the US economic data while global crisis due to Turkey’s actions on the Russian war plane.
The immediate reaction of traders was to move to safe havens like the Swiss Franc and the Japanese Yen resulting in good performances by these currencies. The Swiss Franc at 1.0165 to USD showed gains at 0.2%. USD was at a lost by 0.3% against the Japanese Yen. Investors made profit when USD was high and then shifted to other currencies when the situation in Turkey deteriorated.
AUD and NZD benefited from the USD rate decline. AUD gained 16 points at 0.7272 and NZD at 25 points at 0.6580.
Early today, the dollar slid lower as investors avoided long-positions as the US heads for the Thanksgiving holiday. The tension caused by Turkey downing a Russian aircraft contributed to the sluggish investments.
From an 8 month peak of 100.000 dollar index, the value now is down at 99.615. The Japanese yen is ahead of the USD from a week and half low of 122.31 to 122.57.
Those who invest in the US dollar did not mind the data that showed the growth of the US economy in the 3rd quarter reports which will trigger an interest rate hike by December.
A senior currency expert from the Commonwealth bank, Elias Haddad, commented that a “Robust U.S. domestic demand growth remains the main driver of U.S. economic activity and justifies a December Fed funds rate increase. Still, we expect the Fed’s tightening cycle to be gradual which will limit significant USD upside”.
The euro showed reverses from $1.0673 down to $1.0646. The US currency against the Turkish lira rose at 2.8700.
The Russian rouble had gains from the recovery of oil prices. Commodity currencies are doing well. USD/CAD pair is siding with CAD at C$1.3436 to one USD. The AUD is hit a high in a month’s period at $0.7266.
Monday’s early trading showed the euro getting stronger after hitting the all-time low for the past seven months on Asian time. The euro was at $1.0600 on its first round of trading from the options market.
A strong rally from the euro zone supported the single currency. However, analysts and traders are apprehensive about euro’s future especially that the European Central Bank is set to have a meeting on monetary policy in December. The results can totally reverse the euro position.
It is expected that the $1.06 position will push on for the week. The major banks, on the other hand, are expecting the euro will be at par with the dollar in the coming months due to the US Fed plan to raise interest rates and the ECB taking the opposite way.
Mario Draghi, ECB President, have issued comments that reinforced the expectations that the bank will implement more monetary stimulus when the board meets on Dec 3. The said stimulus is likely to create more pressure for the euro currency.
The biggest illegal foreign exchange network in China has been exposed and apprehended by the Chinese authorities. The network is said to be dealing with billions of USD transactions.
Authorities said that the bust was made in the city of Jinhua of the Zhejiang province. The network is composed of hundreds of people with eight separate units or “gangs”. These gangs operated from almost a dozen separate “dens”.
The network transferred money from accounts in Chinese and Hong Kong financial institutions in order to avoid compliance to the restrictions imposed on currency movements outside the country.
The illegal operation was actually cracked down last December 15, 2014 but the details of the activities have only been disclosed this weekend. Authorities did not give any reason why disclosure was made public after almost a year.
A Chinese daily newspaper, People’s Daily, reported that at there has been 69 persons that have been slapped criminally charges while 203 individuals were penalized with administrative sanctions.
410Billion yan was said to the amount involved in the transactions of this network.
Anti-money laundering authorities from the Central Bank of China as well as local Jinhua police detected suspicious activities in September last year. This “red flag” called for joint FOREX regulators and the local police to start a deep investigation into the matter. The project was code named “9-16”.
The alleged mastermind whom police identifies as Zhao set up shell companies in Hong Kong. Then the network people opened more than 800 accounts also in Hong Kong and other Chinese provinces to avoid the FOREX limits set by the Chinese government. Money was transferred to other countries in amounts that would not go through the usual regulatory check. The money would be for settlement by a number of banks outside China.