Exchange Rate Outlook: GBP/USD Close to 2½ Year High

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Pound Sterling

Ahead of the release of UK manufacturing PMI the Pound rallied to a two and a half year high against the US Dollar and approached an eleven-month high against the Euro. The British asset was supported by data showing that UK house prices rose on a nationwide basis. Economists have forecast that the gauge of manufacturing rose from 56 to 56.1 in November, confirming that the sector continues to enjoy expansion. If this prediction proves accurate the Pound could extend gains.

GBP/EUR is trading in the region of 1.2071 and GBP/USD is trading in the region of 1.6410

US Dollar

As encouraging manufacturing data in China upped demand for higher-risk assets over the weekend the ‘Greenback’ slipped against several of its main rivals. This broad-based US Dollar weakness is likely to continue if the US ISM manufacturing gauge drops from 56.4 to 55.1 as economists’ expect.

USD/GBP is trading in the region of 0.6091 and USD/EUR is trading in the region of 0.7350

Euro

Although the Euro was still locked in a bullish relationship with the Pound as the European session got underway, the common currency was trading strongly against the US Dollar. The common currency then received additional support as French and Italian manufacturing PMI figures were positively revised.

EUR/GBP is trading in the region of 0.8285 and EUR/USD is trading in the region of 1.3587

Australian Dollar

Stronger-than-forecast expansion in China’s manufacturing sector boosted Australia’s trade prospects overnight and helped the ‘Aussie’ advance from close to a three-month low against the ‘Buck’. Additional Australian Dollar movement is likely to occur tomorrow after a domestic retail sales report is published and the Reserve Bank of Australia delivers its rate decision.

AUD/GBP is trading in the region of 0.5571, AUD/EUR is trading in the region of 0.6732 and AUD/USD is trading in the region of 0.9152

New Zealand Dollar

The ‘Kiwi’ advanced on several of its most traded rivals as a result of a measure of manufacturing in China coming in at 50.8 rather than the 50.5 expected, and the commodity-driven asset was also able to climb on the ‘Aussie’ following a positive export price report for New Zealand. China’s non-manufacturing PMI data could cause New Zealand Dollar movement overnight.

NZD/GBP is trading in the region of 0.5001, NZD/EUR is trading in the region of 0.6034 and NZD/USD is trading in the region of 0.8193

Canadian Dollar

Despite last week’s better-than-forecast Canadian growth report, domestic deflation concerns and fears that the Bank of Canada will refrain from reining in stimulus as early as hoped left the ‘Loonie’ languishing for another week. The commodity-driven currency weakened against the majority of its peers and edged lower still as the price of oil declined.

CAD/GBP is trading in the region of 0.5737, CAD/EUR is trading in the region of 0.6923 and CAD/USD is trading in the region of 0.9406

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.