GBP, AUD Stronger, EUR, USD Exchange Rates Decline

The currency market experienced notable volatility on Friday in response to a number of factors. The Pound ended the European session trending in a stronger position against the Euro, and with the GBP/USD pairing having moved away from its recent 17-month low. Sterling was supported by UK Manufacturing Production and Trade Balance figures, with both reports surprising to the upside. It’s possible that Sterling’s uptrend could continue next week if the UK’s Consumer Price Index rises.

Meanwhile, both the Euro and US Dollar declined as a result of disappointing domestic data. Subpar industrial production figures for both France and Germany piled pressure on the Euro and declines were consolidated as Germany’s trade data showed a narrowing in the surplus of the Eurozone’s largest economy. The US Dollar, though initially stronger following the release of the highly influential US Non-Farm payrolls report, later lost ground as investors chose to focus on the decline in average earnings rather than the increase in positions. The Canadian Dollar also recorded losses against the majority of its currency counterparts after domestic employment figures showed a decline of more than 4,000 positions in December. A jobs increase of 15,000 had been expected.

Australian Dollar exchange rate movement was particularly volatile on Friday with the increase in gold prices and the disappointing US data outweighing the negative impact of a below-forecast Australian Construction PMI report. Australian retail sales were also shown to have increased by less-than-expected on the month, but the Australian Dollar still closed out the European session trending 1.0% higher against the US Dollar and more than 0.5% higher against the Pound.

Next week's UK and US Consumer Price Indexes could prove influential in terms of currency market movement.