Exchange Rate Outlook: BoE minutes inspire GBP/USD fluctuations

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Pound Sterling

If the minutes from the Bank of England’s latest policy meeting are reflective of the strong UK data which has emerged over the last few months the Pound could enjoy a bullish trading session against its US counterpart. As local markets opened Sterling was trading close to a three-week high against the US Dollar and fluctuated against the Euro following the publication of surprising German producer price figures.

GBP/EUR is trading in the region of 1.1921 and GBP/USD is trading in the region of 1.6132

US Dollar

Comments issued by Federal Reserve officials regarding a delay to the tapering of US stimulus piled pressure on the ‘Buck’ yesterday and the North American asset slumped against several of its main rivals. However, if today’s US retail sales report meets or exceeds estimates for an increase of 0.1 per cent the US Dollar could rally.

USD/GBP is trading in the region of 0.6200 and USD/EUR is trading in the region of 0.7390

Euro

Although the Euro enjoyed a bullish relationship with its peers yesterday as a gauge of economic sentiment for Germany powered to a four-year high, this morning the common currency experienced modest fluctuations as the German producer price index unexpectedly declined by 0.2 per cent in October. While global news will impact the Euro today, investors will also be looking ahead to tomorrow’s German/Eurozone services and manufacturing PMI.

EUR/GBP is trading in the region of 0.8389 and EUR/USD is trading in the region of 1.3532

Australian Dollar

After the People’s Bank of China asserted that it intends to loosen restrictions on the value of the Yuan, Australia’s trade prospects were boosted and the ‘Aussie’ advanced on its rivals. The South Pacific asset barely reacted to the news that local skilled vacancies declined by 0.1 per cent in October and closed the local session little changed.

AUD/GBP is trading in the region of 0.5822, AUD/EUR is trading in the region of 0.6934 and AUD/USD is trading in the region of 0.9387

New Zealand Dollar

Yesterday Federal Reserve Chairman Ben Bernanke stated that interest rates would be held near zero for as long as necessary. The central bank chief also failed to offer a timeline for the tapering of stimulus and the appeal of the ‘Greenback’ declined as a result. Consequently, the ‘Kiwi’ advanced on the US Dollar during a rather quiet local trading session.

NZD/GBP is trading in the region of 0.5174, NZD/EUR is trading in the region of 0.6152 and NZD/USD is trading in the region of 0.8328

Canadian Dollar

The US Dollar might have broadly weakened as a result of Federal Reserve tapering news but the commodity-driven Canadian Dollar was also struggling as crude oil fell to a five-month low. Today ‘Loonie’ movement could be inspired by the release of Canadian wholesale sales data. Bank of Canada Governor Stephen Poloz is also due to speak at a Senate Committee at 21:15 GMT.

CAD/GBP is trading in the region of 0.5922, CAD/EUR is trading in the region of 0.7060 and CAD/USD is trading in the region of 0.9555

These exchange rates were correct as of 9:05 am

Richard Martin
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After working in business development for a major UK currency brokers for several years, Richard left Britain to help set up the company’s Australian office and now lives and works in Queensland; making the most of his new Down-Under lifestyle.