Exchange Rate Outlook: GBP/EUR Pushing Above 1.20

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Pound Sterling

With yesterday’s encouraging UK manufacturing PMI boosting the Pound, the British asset began the European session in a strong position against several of its most traded rivals and neared a two-year high against the US Dollar. If today’s UK construction report also surprises to the upside Sterling could see additional gains.

GBP/EUR is trading in the region of 1.2082 and GBP/USD is trading in the region of 1.6378

US Dollar

During the North American session a gauge of US manufacturing was shown to have climbed from 56.4 to 57.3 in November. This surprisingly strong result renewed speculation surrounding the possibility of the Federal Reserve tapering stimulus before the spring and pushed the ‘Greenback’ to a six-month high against the Yen. However, the safe-haven asset continued to struggle against a bullish Pound ahead of tomorrow’s US trade balance figures.

USD/GBP is trading in the region of 0.6104 and USD/EUR is trading in the region of 0.7377

Euro

While positive manufacturing PMI for Germany and the Eurozone helped the Euro advance on several of its rivals yesterday, the common currency faltered against the Pound and fluctuated modestly against the ‘Buck’. Today’s Eurozone producer price index is likely to be the main cause of Euro movement as the day continues.

EUR/GBP is trading in the region of 0.8274 and EUR/USD is trading in the region of 1.3558

Australian Dollar

After edging close to a five-year low against the New Zealand Dollar before the Reserve Bank of Australia delivered its rate decision the ‘Aussie’ broadly softened as the central bank once again stressed that the Australian Dollar’s exchange rate was ‘uncomfortably high’. The Australian Dollar had enjoyed a modest boost earlier in local trading as domestic retail sales increased by more than expected.

AUD/GBP is trading in the region of 0.5546, AUD/EUR is trading in the region of 0.6701 and AUD/USD is trading in the region of 0.9092

New Zealand Dollar

Commodity-driven currencies like the ‘Kiwi’ faltered slightly as China’s non-manufacturing PMI slipped slightly in November. The New Zealand Dollar also edged lower against the ‘Greenback’ as upbeat US manufacturing data supported the North American asset. However, the ‘Kiwi’ was able to achieve a five-year high against its bearish Australian counterpart.

NZD/GBP is trading in the region of 0.4990, NZD/EUR is trading in the region of 0.6033 and NZD/USD is trading in the region of 0.8201

Canadian Dollar

With domestic data thin on the ground and the odds of the Federal Reserve tapering stimulus increased by an unexpectedly positive US manufacturing report the ‘Loonie’ plummeted to a two-year low against the US Dollar. Further Canadian Dollar movement may be triggered by US and Chinese news.

CAD/GBP is trading in the region of 0.5743, CAD/EUR is trading in the region of 0.6939 and CAD/USD is trading in the region of 0.9408

These exchange rates were correct as of 9:10 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.