Weekly Currency Transfer Roundup – February 12, 2024

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This week, the US Dollar saw a slight increase of 0.11% against other major currencies, continuing its rise from last week. However, on Friday, it dipped a little, closing at 104.080.

A few key events shaped the dollar’s journey this week:

• The ISM Services PMI came out stronger than expected, boosting the dollar.
• Unemployment claims were slightly lower than anticipated, hinting at a robust job market.
• Fed Chair Powell mentioned plans to cut interest rates three times in 2024, starting in May, which initially put some pressure on the dollar. However, Powell also spoke highly of the US economy’s strength and downplayed the chances of a recession soon, giving the dollar a lift.
• FOMC Member Barkin pointed out that the impressive US economic data might be skewed due to seasonal adjustments, urging caution and patience before any policy changes by the Fed.

For anyone sending money or dealing with currency exchange, these developments suggest the US dollar is strong but faces potential adjustments based on economic data and Fed decisions.

Euro Update: Weekly Currency Update

This week, the US Dollar to Euro (USD to EUR) exchange rate saw a slight gain, marking the fourth week of upward movement with a 0.05% increase. By Friday, however, it dipped slightly by 0.08%, ending the day at 0.9270.

Here’s a simple breakdown of what happened:

• Europe didn’t release any major economic data this week.
• Some positive reports from Germany, Italy, and France showed good trade balances and service industry performance but were offset by some negative data like European retail sales and German industrial production.
• The European Central Bank (ECB) released a bulletin stating it plans to keep interest rates high to control inflation. They’ll be watching economic data closely to decide on future rate changes. Despite this announcement, the Euro’s value against the Dollar stayed pretty stable.

For those looking to exchange money or send it overseas, this means the value between the US Dollar and the Euro has not changed much this week, despite minor fluctuations.

GBP Update: USD to GBP Exchange Rate Observations

This week, the US Dollar to British Pound (USD to GBP) exchange rate saw another week of gains, marking its fourth consecutive week of upward movement with a slight 0.02% increase. However, on Friday, the rate experienced a minor dip, closing at 0.79185, down by 0.08%.

Key Highlights of the Week:

• Monday’s Positive PMI: The Final Services PMI outperformed expectations at 54.3 versus the predicted 53.8, boosting the Pound against the Dollar.
• Retail Sales Growth: Tuesday revealed a higher than expected Retail Sales Monitor year-over-year increase at 1.4%, indicating early week pressure on the USD to GBP rate.
• Construction Sector Surge: The Construction PMI also exceeded forecasts at 48.8, lending further strength to the Pound.
• Bank of England’s Stance: Deputy Governor Sarah Breeden hinted at a more relaxed approach towards interest rate hikes given easing inflation pressures, aligning with Governor Bailey’s openness to rate cuts. This sentiment was reinforced by Catherine Mann’s comments on Thursday, highlighting challenges in meeting the 2% inflation target due to energy prices, goods and services cost disparities, and corporate pricing strategies.

For individuals engaging in currency exchange or sending money, these developments suggest a nuanced GBP strength amidst potential BoE policy shifts. Understanding these trends can aid in making informed decisions on currency transactions involving the USD and GBP.

CAD Update: Fluctuations in the USD to CAD Exchange

This week, the US Dollar to Canadian Dollar (USD to CAD) exchange rate ended its five-week streak of gains, experiencing a slight decrease of -0.05%. By Friday, it had fallen further, closing at 1.34571—a collective loss of about -0.60% over four consecutive sessions.

Here’s a quick rundown of the week’s key events:

• Ivey PMI Surpasses Expectations: Released on Tuesday, the Ivey Purchasing Managers Index (PMI) unexpectedly rose to 56.5, beating the forecast of 55.0, supporting the Canadian Dollar (CAD).
• Bank of Canada’s Remarks: Governor Tiff Macklem spoke on Tuesday, emphasizing ongoing price pressures and the impact of a housing shortage and global costs on inflation. He maintained that reaching the 2% inflation target would be gradual, supporting a steady policy stance.
• Positive Job Market Data: Friday’s employment report showed a surge in jobs to 37.3K, far exceeding the anticipated 16.0K, with unemployment dropping to 5.7% against a 5.9% forecast. This robust job growth put downward pressure on the USD to CAD rate.
• Crude Oil Prices Impact: WTI Crude Oil prices jumped by 5.86% amid Middle East tensions, supporting the CAD. Despite geopolitical worries and fluctuating U.S. production, the rise in oil prices bolstered the commodity-linked CAD, contributing to the week’s decline in the USD to CAD exchange rate.

For those looking to exchange or send money, understanding these dynamics can help in timing transactions to take advantage of favorable exchange rates. The CAD’s strength this week reflects its sensitivity to employment data and oil prices, important factors to consider for currency traders and individuals alike.

AUD Update: Mixed Fortunes Amid RBA’s Stance and China’s Economic Data

This week, the US Dollar to Australian Dollar (USD to AUD) exchange rate experienced a slight downturn, breaking its five-week streak of gains. By Friday’s close, it had fallen by -0.50% to 1.5324.

Key Highlights:

• RBA Holds Rates Steady: The Reserve Bank of Australia (RBA) kept its cash rate unchanged at 4.35%, a decision in line with expectations but hinting at possible future hikes.
• RBA Governor’s Remarks: Michelle Bullock, RBA Governor, in her speech emphasized a cautious approach towards rate adjustments. She highlighted the need for more data to ensure inflation targets are met without disrupting the job market. Bullock’s stance against lowering rates anytime soon supported the Australian Dollar.
• China’s Economic Influence: Negative economic data from China, Australia’s major trading partner, put a cap on the AUD’s strength. The Caixin Services PMI showed no growth, and China’s CPI fell by -0.8% year-on-year in January, the most significant decline since 2009, indicating rapid deflation and a sluggish recovery from pandemic impacts.

What It Means for You:
The dip in the USD to AUD rate could be a favorable moment for converting USD to AUD, as your dollars might fetch more Australian currency than before. If you’re planning to convert Australian Dollars to US Dollars, it’s crucial to stay updated on both the RBA’s future monetary policy decisions and economic developments in China, as these factors significantly influence the exchange rate.

INR Update: INR Stability Amid RBI’s Steady Policy

This week, the US Dollar to Indian Rupee (USD to INR) exchange rate held steady, showing no change after a slight dip last week. By Friday, it slightly improved, marking a minor gain.

Key Points:

• RBI’s Decision: The Reserve Bank of India (RBI) kept the interest rate unchanged at 6.5%, continuing its cautious approach due to inflation concerns near the 6% upper limit.
• Economic Outlook: Despite geopolitical challenges, including tensions in the Middle East that could impact shipping and consumer prices, India’s economy shows resilience with an upgraded growth forecast to 7%.
• Monetary Policy: RBI aims for a restrictive monetary stance to manage inflation, with India’s debt-to-GDP ratio and inflation levels remaining stable.
• Global Influence: India’s growing role in global oil demand and advancements in AI highlight its economic potential amid global uncertainties.

What It Means for You:
The stable exchange rate means there’s little immediate impact for those sending money to India or converting currencies. However, upcoming inflation and industrial production data could influence future rates.

SGD Update: USD’s Steady Climb Continues

This week, the US dollar (USD) extended its winning streak against the Singapore dollar (SGD), gaining +0.24% but slightly dipped on Friday, closing at 1.34602. Federal Reserve Chair Powell’s hint against immediate rate cuts bolstered the USD’s position.

Meanwhile, the SGD remained steady, lacking significant local events to influence its performance. Despite Singapore’s tight monetary policy enhancing the SGD’s regional strength, the USD’s overarching strength across major currencies keeps pushing the USD to SGD rate up.

Impact for You: If you’re converting USD to SGD, the dollar’s current momentum suggests you might get more SGD for your USD. However, ongoing developments in US monetary policy could influence future rates, making it essential to stay updated.

Weekly Currency Event Highlights

AUD (Australian Dollar)

• Mon, Feb 12, 23:30: Westpac Consumer Sentiment (-1.3%)
• Tue, Feb 13, 0:30: NAB Business Confidence (-1)
• Thu, Feb 15, 0:00: MI Inflation Expectations (4.5%)
• Thu, Feb 15, 0:30: Employment Change (20.7K), Unemployment Rate (4.0%)

CAD (Canadian Dollar)

• Tue, Feb 13, 13:30: Building Permits m/m (1.2%)
• Tue, Feb 13, 15:00: Ivey PMI (55.0)
• Wed, Feb 14, 13:30: Trade Balance (1.1B)
• Thu, Feb 15, 13:15: Housing Starts (225K)
• Thu, Feb 15, 13:30: Manufacturing Sales m/m (-0.5%)

CHF (Swiss Franc)

• Tue, Feb 13, 7:30: CPI m/m (0.6%)
• Thu, Feb 15, 7:30: PPI m/m (-0.2%)
• Thu, Feb 15, 8:00: SECO Consumer Climate (-34)

EUR (Euro)

• Mon, Feb 12, 7:00: German Trade Balance (19.0B)
• Mon, Feb 12, 8:15 to 9:30: Services PMI and Sentix Investor Confidence
• Mon, Feb 12, 10:00: PPI m/m (-0.8%)
• Tue, Feb 13, 7:00: German Factory Orders m/m (-0.1%), Retail Sales m/m (-0.9%)
• Thu, Feb 15, 9:00: ECB Economic Bulletin
• Fri, Feb 16, 7:00: German Final CPI m/m (0.2%), Italian Industrial Production m/m (0.8%)

GBP (British Pound)

• Mon, Feb 12, 9:30: Final Services PMI (53.8)
• Tue, Feb 13, 0:01: BRC Retail Sales Monitor y/y (1.2%)
• Tue, Feb 13, 9:30: Construction PMI (47.2)
• Wed, Feb 14, 7:00: Halifax HPI m/m (0.8%), CPI y/y (4.1%), Core CPI y/y (5.2%)

JPY (Japanese Yen)

• Mon, Feb 12: Bank Holiday (All Day)
• Mon, Feb 12, 23:50: PPI y/y (0.1%)
• Tue, Feb 13, 6:00: Prelim Machine Tool Orders y/y (-9.6%)

NZD (New Zealand Dollar)

• Mon, Feb 12, 0:30: RBNZ Gov Orr Speaks
• Tue, Feb 13, 2:00: Inflation Expectations q/q (2.76%)

USD (US Dollar)

• Mon, Feb 12, 14:20: FOMC Member Bowman Speaks
• Mon, Feb 12, 17:00: FOMC Member Barkin Speaks
• Mon, Feb 12, 19:00: Federal Budget Balance (-39.3B)
• Tue, Feb 13, 13:30: Core CPI m/m (0.3%), CPI m/m (0.2%), CPI y/y (2.9%)
• Wed, Feb 14, 15:30: Crude Oil Inventories (5.5M)
• Thu, Feb 15, 13:30: Unemployment Claims (217K), Empire State Manufacturing Index (-11.9)

Conclusion

This week, the US Dollar experienced varied results across major currencies. Gains were noted against a collective of six major currencies, bolstered by strong ISM Services PMIs and encouraging employment figures. Yet, the Dollar saw a slight retreat against the Euro and the Pound. On Friday, the US Dollar Index (DXY) experienced a minor drop. The USD to CAD rate dipped, influenced by positive Canadian economic reports and an uptick in crude oil prices.

Meanwhile, the USD also saw declines against the Australian Dollar and the Singapore Dollar, while its performance against the Indian Rupee stayed steady.

So, stay alert and enjoy the financial dance! Happy transferring!