The British currency had a favorable performance today versus multiple

key-currencies today, beating the euro and the Swiss franc as the country starts to show more evident signs of recovery, attracting investors back to the U.K.

After inflation surpassed analysts estimates and Bank of England’s target today, the pound gained considerably versus most of the main traded currencies, specially versus the euro, as Greece’s budget deficit is still affecting the currency’s outlook, and ths Swiss franc, which had a rally halted as fears of interventions from the nation’s central bank emerged.

EUR/GBP slid to 0.8727 as of 23:41 GMT from a previous rate of 0.8785 yesterday.

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The Swiss currency finally felt the central bankers pressure and declined considerably versus most of its main trading partners’ currencies, on speculations that measures will be taken by the financial authorities to avoid the franc to gain.

The Swiss franc dropped even versus the European single currency as some of the bloc’s members are providing negative economic data, evidencing that the Swiss National Bank pressure to halt the franc’s rally is taking effect. The pound was one of the biggest winners versus the franc as the U.K.’s inflation rose beyond forecasts.

GBP/CHF traded at 1.6886 as of 22:31 GMT from a previous rate 1.6737 yesterday.

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The Swiss franc gained versus several

key-currencies today despite the nation’s central bank concerns regarding the strength of its currency, which already was expressed previously in statements mentioning eventual future interventions to halt the franc’s rally.

Even if the Swiss National Bank President Philipp Hildebrand stated last week that franc’s fluctuations will be monitored closely, expressing concern with the Swiss currency high rates, the franc advanced today versus the euro as traders feel it is still undervalued versus the European single currency. According to analysts, the SNB will impose more than verbal interventions anytime soon as long as the franc continues bullish.

EUR/CHF traded at 1.4740 as of 21:31 GMT from an opening rate of 1.4753 yesterday.

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The Canadian dollar declined versus its U.S. counterpart and

lower-yielding currencies as risk aversion rose impacting markets with extreme influence in the loonie rates, those of raw materials and equities, which dropped globally this Friday.

The loonie was impacted today as energetic and metallic commodities declined, specially the crude oil, as raw material exports account for more than half of the country’s international trade revenue, in a day of bearish markets in New York and Toronto. China’s new tightening lending policy declined appeal for high-yielding currencies, and despite U.S. mediocre data published in reports this Friday showing a slow down in the country’s inflation, the greenback advanced versus the loonie after touching a three-month low earlier this week.

The Canadian dollar has been fluctuated in almost perfect correlation with commodities in the beginning of 2010, despite the country’s fundamentals, which are also adding confidence for the loonie to gain in currency markets, according to analysts. As the crude oil retreated below $80 a barrel, the loonie’s rally was halted, but may continue if risk appetite returns during the next weeks.

USD/CAD traded at 1.0284 as of 16:38 GMT after touching 1.0219 yesterday. CAD/JPY declined to 88.27 from 88.85.

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Once again interest rates are fueling a rally for the Aussie dollar as it happened in the second half of the last year, when the South Pacific currency ranked among the best performing options in

foreign-exchange markets.

Positive employment data published in Australia this Wednesday is helping the Aussie to rally to high levels versus most of the main traded currencies, as a declining unemployment rate, currently at 5.5 percent and much better than other key-economic regions in the world, is fueling speculations that interest rates will be once again hiked in the country next month.

AUD/USD traded at 0.9315 as of 00:11 GMT from a previous intraday rate of 0.9241.

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The Japanese currency declined in the beginning of this Thursday’s session on Australia’s better than expected employment data, which increased attractiveness for riskier assets as the South Pacific economy recovery improves confidence among traders.

The yen, known as the best refuge currency for times of uncertainty, declined today as unemployment surprisingly fell in Australia, bringing Japanese investors to buy riskier assets overseas, as the Australian economic recovery indicates better economic conditions not only in the South Pacific region but also among its main trading partners.

AUD/JPY traded at 85.01 as of 02:35 GMT from a previous rate of 83.89 in the intraday chart.

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The dollar had a mediocre performance today losing versus a considerable number of currencies after the nation’s central bank was not so optimistic regarding the U.S. economy recovery, declining appeal for the greenback.

The dollar posted a disappointing performance in a day were equities and commodities markets increased appeal for higher-yielding currencies. The British pound posted another advance versus the greenback as Bank of England’s policy markers signaled that interest rates in the U.K. are due to be hiked at some point this year. The Federal Reserve stated that a modest economic recovery is taking place in the U.S., fact which traders interpret as a delay in forecasts of interest rate raises, which is certainly declining the attractiveness that fueled a dollar rally versus most of the main traded currencies in December.

As speculations of immediate rate hikes fade away in the U.S., the greenback rates will be more determined by the pace of recovery in the country compared to other economic regions throughout the world, specially in Europe and Asia, where the main U.S. trading partners are located.

EUR/USD traded at 1.4506 as of 20:57 GMT from a previous intraday rate of 1.4480 yesterday, in a session of high volatility for the currency pair. GBP/USD trded at 1.6286 from 1.6171.

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After several days gaining versus the dollar and the euro, the Norwegian currency slid versus main traded currencies as a bearish day in equities markets and decreased demand for commodities shunned investors from assets in the Nordic country.

The Norwegian krone was affected today as the crude oil, the nation’s chief export, had a decline on its rates after China imposed new lending requirements for banks in the country, affecting markets’ sentiment, consequently impacting stock markets and demand for high-yielding currencies.

USD/NOK traded at 5.6518 as of 19:08 GMT from today’s opening rate of 5.6174.

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The Canadian dollar had its rally towards parity with its U.S. counterpart halted after a monthly trade deficit was posted today, raising doubts that the nation’s economy is not going as good as some analysts like to believe.

The loonie had a disappointing surprise today as Canada posted a trade deficit of more than $300 million while forecasts suggested a surplus of $500 million, surprising traders and affecting the outlook of one of the best performing currencies so far in the beginning of 2010. The Canadian dollar had profited so far this month from high risk aversion and an increasing demand for the nation’s commodities, which influenced the Canadian economic expectations, impacted today showing traders that Canada’s resilience is not as high as previously imagined.

Doubts regarding the overconfident Canadian economic outlook helped other currencies to pare losses versus the loonie, specially its U.S. counterpart, which jumped from the lowest rate almost 3 months versus Canada’s currency. Monthly reports can be deceiving thought, as seasonal adjustments may hide the actual economic scenario of a country, which is the case of Canada, is still above the average.

USD/CAD traded at 1.0362 as of 16:39 GMT from a previous rate of 1.0334. CAD/JPY tumbled to 87.59 from 89.09.

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The Swiss currency had its previous week rally versus currencies like the pound and the euro halted today after the national central bank took a position against further advances of the franc, as the current appreciation was considered excessive by SNB officials.

After a rally that lasted during most of the past week trading session, the Swiss National Bank President Philipp Hildebrand stated today that the franc’s fluctuations will be monitored closely, also signaling that policy makers will attempt to prevent further gains for the its currency, as current levels, specially versus the euro, are considered too high. The Swiss franc also advanced considerably last week versus the greenback, as bets that interest rates will be raised in the U.S. declined after negative data was released.

Most of the franc’s advance during the past month were based on speculations that the SNB authorities would take a rather passive policy regarding the currency’s fluctuations, but after today’s affirmations, it’s likely that the Swiss currency will experience a considerable decline, or at least, a rather neutral trend as fears for interventions will certainly count on trader’s sentiment towards the Swiss franc.

EUR/CHF currently trades at 1.4752, 15:52 GMT, from as 1.4722 when markets opened yesterday. GBP/CHF also climbed to 1.6391 from 1.6310.

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The Canadian currency started another week strong versus several main traded currencies, specially lower yielding options, as demand for commodities continues to bring capital to Canada, the biggest oil supplier for the United States.

The rising demand for energetic and metallic commodities is helping the loonie to remain as one of the best bets in foreign-exchange markets in the beginning of 2010, as commodities exports are responsible for around 50 percent of Canada’s international trading capital inflows. This Monday, the Canadian currency gave another step towards parity with its U.S. counterpart, despite retreating later, trading at the highest level in almost three months, as the global economic recovery is providing support for traders to take further risks raising equities rates, which also have a strong correlation with Canada’s currency price.

Analysts are very confident regarding the loonie’s strength as no fundamental or technical factor is so far being an obstacle for its advance. The Bank of Canada may, at some point, halt its currency rally, as it had already done it in late 2009, alleging that a strong currency may affect the country’s exports, and consequently, its recovery.

USD/CAD currently trades at 1.0306 as of 14:17 GMT after bottoming at 1.0250 two hours earlier, and from as high as 1.0372 last Friday.

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The kiwi dollar struggled on Friday enabling the pound to jump 1.4%, briefly nearing the 2.30 level, as risk appetite in the market waned.

• Higher-risk currencies struggled to make headway at the end of last week as the rally in global equities in the wake of the positive US GDP data came to an abrupt halt.
• As global stocks fell, investors sought shelter in the haven currencies fuelling a sell-off in the higher-yielding kiwi dollar, buoying the sterling price.
• In trading this morning, the New Zealand dollar has pulled back from six-week lows against the pound, with profit taking in high-yield currencies taking a pause.
• Support has also come from improved manufacturing data in China, a key importer of New Zealand goods, which has outweighed some of the negative sentiment toward the currency.
• Analysts have noted though that reduced support for a rise in interest rates and lower risk appetite may prevent the kiwi from regaining its strong valuation.

The pound climbed just over two cents against a broadly weakened aussie dollar on Friday with a rise in risk aversion putting selling pressure on the higher-yielding currency.

• Weak data in the US and plummeting global equity markets enable the pound to gain as investors took the opportunity to cash profits in the aussie and retreat to safer assets.
• Analysts have recently noted that the rally in risky assets could come to an end. Conditions for perceived riskier assets to gain requires a flow of positive economic data combined with loose global monetary policies and low interest rates.
• The strong US GDP figure supported the rally in higher-yield currencies, but as the economic recovery shifts the balance in favour of tightening policy, it will likely signal the end of the rally in risky assets.
• However, the aussie is trading strongly again this morning, currently up over a percent, as investors bet that the Reserve Bank of Australia will raise interest rates at their meeting on Tuesday.
• Traders also said that Chinese data showing manufacturing activity at an 18-month high helped to mitigate some of the recent loss in risk appetite, bolstering aussie demand.

The dollar strengthened, consolidating after broad selling on the back of data showing strong US growth, gaining over a cent on the single currency.

• Equities took a sharp downturn at the end of last week, having rallied after the positive US GDP data, most likely as a result of end of month profit taking, which buoyed demand for the greenback.
• Data also showed that US consumer spending fell for the first time in five months in September, coinciding with the end of the government’s car scrappage scheme.
• The US Commerce Department says spending dropped 0.5% in September, compared with a 1.4% rise in August, which encouraged investors to buy back into the haven currency.
• The US dollar extended gains in the afternoon, pushing the euro down near three-week lows after data showed that a US Midwest manufacturing index was stronger-than-expected failed to heighten risk appetite.
• The euro has climbed in trading this morning with the price currently hovering around the mid 1.47 mark.

The dollar snapped four days of gains against the euro as the US economy returned to growth in the three months through September, officially exiting recession.

• The US government’s advance estimate showed gross domestic product grew at an annualised rate of 3.5% in the third quarter, the first rise since the second quarter of 2008, which beat expectations for a reading of 3.3%.
• The data reduced the safe-haven appeal of the greenback, encouraging investors to sell their dollar holdings in favour of growth-linked currencies, enabling the euro to climb over a cent on the day.
• Analysts did note however, that concern may still linger over whether the US economy will be able to sustain this level of growth as the government begins to unwind its stimulus packages.
• In addition, trading yesterday saw the European Commission’s economic sentiment indicator post a bigger-than-expected October rise. The index for the eurozone rose to 86.2 from 82.8 in September, beating expectations and lending support to the single currency‘s rally.

Sterling extended its rally, briefly climbing above $1.66 as the dollar sold off broadly after strong economic growth data spurred demand for riskier assets.

• In early trading, the pound found support from data that showed UK mortgage approvals for September increased to their highest level since February last year, exceeding market forecasts.
• Risk appetite was buoyed further in the afternoon after a report showed the US economy returned to growth in the third quarter, boosting stocks and reducing the appeal of the relative safety of the greenback.
• The US economy in the third quarter grew by 3.5% on an annualised basis, beating market expectations of a 3.3% rise and easing recently voiced concerns over the strength of the US recovery.
• Analysts noted that with the US GDP figure meeting market expectations, market players returned to using the dollar to fund carry trades, driving the US currency lower.
• The gains of 1.0% helped propel sterling toward its first monthly advance versus the dollar since July.
• However, gains were capped as the Labor Department revealed that unemployment claims inched lower in the week to 530K but missed forecasts of a drop to 520K.

The pound continued to rally yesterday and is now poised to snap a three-month decline versus the euro, as the UK showed positive economic signals.

• Data from the Bank of England revealed that UK net consumer lending rose less than expected in September but the number of loans approved for house purchases did hit its highest level in 18- months.
• Mortgage approvals rose to 56,215 from a revised 52,970 in August, which is the highest level of approvals since February last year and marks a solid recovery from September 2008 when only 33,419 mortgages were approved.
• The more positive data saw traders trimming excessive short positions in the pound, enabling the UK currency to briefly extend gains over 1.12, and suggesting that the markets may have overreacted to the surprisingly weak GDP data last week.
• Analysts noted that the UK currency also benefited as the euro fought to stem its broad slide this week, as traders saw the slump in global equities earlier in the week as a sign to sell the single currency.

The single currency slipped further away from recent 14-month highs against the dollar yesterday, losing nearly a cent to close down at 1.4707.

• The US dollar rose, stretching a rally against the euro to a fourth day, supported by weak U.S. economic data that weighed on equity markets and led investors to seek safety in the greenback and cut exposure to assets perceived as risky.
• Initially though, the euro pared early losses after data showed core US durable goods orders were better-than-expected in September.
• The report revealed that the core figure, which excludes transport equipment, rose by 0.9%, higher than forecasts of a 0.6% rise, strengthening risk appetite in the market.
• However, in the afternoon the euro extended losses after further data showed that US home sales unexpectedly fell, declining 3.6% last month to an annual rate of 402,000, disappointing market forecasts that expected a 2.6% rise.
• Analysts noted that the soft housing sales figure offset positive durable goods orders, given that the latter data is generally volatile and sometimes does not represent the whole economic story.
• In trading today, investors will be eagerly awaiting US 3rd quarter GDP data, released at 12:30.

The pound made up further ground on the kiwi dollar, gaining 0.65% after positive sales data supported evidence that the UK economy is still on the road to recovery.

• The sales data, which came in above market forecasts, encouraged investors to buy back into the UK currency, with the price briefly reaching above 2.20.
• Conversely, selling pressure remained on the New Zealand dollar after the nation’s Prime Minister expressed concern over the currency’s strength, and stated that there were few tools with which to deal with it.
• Higher-yielding currencies were also under pressure overnight as Asian equities turned negative, with Nikkei 225 losing over a percent, dulling demand for “riskier” assets.
• In trading this morning the pound has continued to rally, rising to a three-week high over 2.22 as a New Zealand business confidence survey unexpectedly undershot forecasts, weakening the possibility of a hawkish RBNZ rate statement to be made this evening at 20:00.