Exchange Rate Outlook: GBP/USD Heading for 5-Day Decline

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Pound Sterling

After softening yesterday following the Bank of England’s rate decision the Pound was heading for five-day declines against both the Euro and US Dollar. However, Sterling was able to edge higher during European trading as UK house prices accelerated by more than expected. Today’s UK inflation report could inspire further movement.

GBP/EUR is trading in the region of 1.1966 and GBP/USD is trading in the region of 1.6338

US Dollar

In the wake of stronger-than-forecast US GDP and jobless claims data the ‘Greenback’ strengthened against its rivals. The US Dollar continued to climb on peers like the Yen as investors speculated on the likelihood of US non-farm payrolls data surprising to the upside. Today’s employment report can be expected to inspire widespread volatility.

USD/GBP is trading in the region of 0.6120 and USD/EUR is trading in the region of 0.7324

Euro

The Euro rallied to a five-week high against the US Dollar yesterday as the European Central Bank avoided mentioning negative interest rates in its policy statement. The common currency also strengthened against the Pound ahead of today’s German factory orders report.

EUR/GBP is trading in the region of 0.8358 and EUR/USD is trading in the region of 1.3656

Australian Dollar

Over the last week the ‘Aussie’ has been locked in a bearish relationship with the US Dollar, Pound and Euro as poor domestic data and the prospect of further intervention from the Reserve Bank of Australia piled pressure on the currency. The Australian performance of construction index rose from 54.4 to 55.2 in November but previous assertions that the ‘Aussie’ remains uncomfortably high stopped the currency gaining in response.

AUD/GBP is trading in the region of 0.5543, AUD/EUR is trading in the region of 0.6632 and AUD/USD is trading in the region of 0.9048

New Zealand Dollar

The New Zealand Dollar might be performing well against its Australian counterpart but the commodity-driven asset has shed 1 per cent against the ‘Greenback’ over the past week. With US non-farm payrolls scheduled for release today and likely to inspire significant Federal Reserve tapering speculation additional currency market movement is likely.

NZD/GBP is trading in the region of 0.5017, NZD/EUR is trading in the region of 0.5996 and NZD/USD is trading in the region of 0.8184

Canadian Dollar

While the ‘Loonie’ posted gains against the US Dollar and Pound yesterday as Canadian building permits data surprised to the upside, the currency’s advance on the ‘Buck’ was short lived. The CAD/USD fell back to an almost three-year low as domestic PMI declined and US data impressed. The ‘Loonie’ was holding steady ahead of the release of Canadian employment data.

CAD/GBP is trading in the region of 0.5745, CAD/EUR is trading in the region of 0.6875 and CAD/USD is trading in the region of 0.9388

These exchange rates were correct as of 9:20 am

Laura Barrett
This post was written by
Laura moved from the US to the UK several years ago. As a corporate sales executive for a leading foreign exchange company, Laura has expert knowledge of currency movements and market trends and is able to offer specialist guidance regarding making a trade at the most lucrative time and protecting transactions from currency risk.