Exchange Rate Outlook: Central Bank Decisions Due Today


Pound Sterling

With both the Bank of England and European Central Bank rate decisions looming the Pound edged lower against the Euro but was little changed against the US Dollar. Economists are expecting the BoE to leave rates and the level of asset purchases unaltered. Further Sterling volatility is likely to be inspired by the UK’s Autumn Statement, which Chancellor of the Exchequer George Osborne is scheduled to deliver at 11:15 GMT.

GBP/EUR is trading in the region of 1.2040 and GBP/USD is trading in the region of 1.6392

US Dollar

Yesterday reports revealed that the world’s largest economy added more positions than forecast in November while the US trade deficit narrowed. The ‘Buck’ consequently posted modest gains against several of its higher-risk rivals but went on to soften against the Yen as demand for the safe-haven asset was supported by falling equities. Although investors will be looking ahead to tomorrow’s influential non-farm payrolls report, US Dollar movement can be expected to occur in the hours ahead as a result of US GDP, factory orders and initial jobless claims figures.

USD/GBP is trading in the region of 0.6102 and USD/EUR is trading in the region of 0.7342


Today’s European Central Bank rate decision will be of particular interest given the patchy nature of the economic data emerging from the Eurozone in recent weeks. As the currency bloc’s return to growth faltered in the third quarter of the year the odds of the ECB having to introduce additional measures to support the economy are increasing. If ECB President Mario Draghi offers any hints regarding the possibility of negative interest rates the Euro will come under pressure and could fall to fresh lows against peers like the Pound and US Dollar.

EUR/GBP is trading in the region of 0.8308 and EUR/USD is trading in the region of 1.3618

Australian Dollar

The ‘Aussie’ extended losses against its US and New Zealand counterparts during the local session as a report showed that the South Pacific nation racked up a bigger-than-expected trade deficit in October. Though exports to China reached a new record high, exports to other nations fell flat and imports increased by 1 per cent. With the weekend rapidly approaching additional Australian Dollar movement could be inspired by a domestic AiG performance of construction index.

AUD/GBP is trading in the region of 0.5511, AUD/EUR is trading in the region of 0.6638 and AUD/USD is trading in the region of 0.9033

New Zealand Dollar

Data for New Zealand has been a bit thin on the ground over the last few days but the commodity-driven currency has still enjoyed significant gains against its Australian rival. The ‘Kiwi’ was also able to recover some ground against Sterling as UK services PMI fell short of estimates.

NZD/GBP is trading in the region of 0.5016, NZD/EUR is trading in the region of 0.6036 and NZD/USD is trading in the region of 0.8201

Canadian Dollar

The Bank of Canada’s decision to leave interest rates unchanged and highlight deflation fears ensured that the ‘Loonie’ received another pummelling during North American trading. The Canadian Dollar remains softer against the ‘Greenback’, Pound and Euro ahead of today’s domestic building permits and PMI data.

CAD/GBP is trading in the region of 0.5720, CAD/EUR is trading in the region of 0.6887 and CAD/USD is trading in the region of 0.9376

These exchange rates were correct as of 9:05 am

Richard Martin
This post was written by
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.