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MORNING BELL: Greenback near three-month lows

The British pound has been trading near 5.5 month highs, continuing to enjoy a post-election climb. The Conservatives won the majority votes last Thursday for the first time in the last twenty-three years. Since the outcome, sterling has climbed more than 3.5%, its strongest performance in six years. On the other hand, Greece has been under a lot of pressure by German politicians pushing to implement reforms and warning that a third aid package will not be an option until some changes start becoming visible.

The New Zealand dollar was falling across the market early on Monday due to the new tax on home investments. Speculations for an upcoming interest rate cut rose after a new capital gains tax (up to 33%) was imposed on residential properties that would be sold within two years of purchase. The news pushed the New Zealand dollar down by 0.5% to $0.74222. The Aussie on the other hand is posting gains against the weaker US dollar  on Monday. All eyes are set on BHP Billiton’s demerger of South32, which will be Australia’s biggest new listing in the past 15 years (the shares are also traded on JSE). 

The greenback has been trading near three-month lows against the euro during Monday’s Asian session, affected by Friday’s worse than expected consumer confidence data. The disappointing news hiked expectations that the Federal Reserve will wait further before increasing interest rates. The Dollar Index is down to four month lows, struggling to stay above last week’s $93.15. On the other hand, gold was still trading near three-month highs today, up to $1,225, boosted by the soft US data.



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