Thursday, 25 April 2013

Strong perforemance by commodity currencies

Trade report 24/04/2013

Commodity prices may receive renewed support ahead of next week’s ECB decision. The stronger performance of commodity prices has strengthened commodity currencies like CAD and AUD, who are recovering from recent lows. One suspects the ZAR will receive similar support just as it did yesterday.

For a second consecutive day the rand gained as metal prices rallied on reports that banks will do more to encourage growth. Gold and platinum prices increased, but orders for durable goods in the US fell the most in seven months and German business confidence slipped for a second month.

One day before the UK growth statistics are to be released, Chancellor George Osborne has become anxious to reveal measures to increase economic growth. On Wednesday he announced revised plans for the Funding and Lending scheme, but UK experts on credit supply were not impressed. Economists and BOE insiders welcomed the scheme, but believe it will only have marginal effect.

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