Exchange Rate Outlook: GBP/USD Heading for Third Five-Day Gain

foreign_exchange_rates

Pound Sterling

Yesterday the Pound enjoyed a bullish relationship with several of its main peers as UK trade balance and factory order data topped forecasts. Sterling is now heading for a third consecutive 5-day gain against the US Dollar. The Pound also extended gains against the Euro after a Bank of England official confirmed that interest rates would stay at historic lows until the UK sees ‘strong sustained growth’ for a ‘number of years’.

GBP/EUR is trading in the region of 1.1988 and GBP/USD is trading in the region of 1.6207

US Dollar

While the ‘Greenback’ rallied yesterday as US initial jobless claims fell by more-than-forecast (adding to the case for the Federal Reserve tapering stimulus) gains were limited as the US Philadelphia Fed. Business Outlook plummeted by significantly more than predicted. The measure slipped from 19.8 to 6.5 in November rather than hitting 15.0 as expected.

USD/GBP is trading in the region of 0.6169 and USD/EUR is trading in the region of 0.7410

Euro

With ECB President Mario Draghi reassuring investors on the issue of negative interest rates the Euro was able to rebound following yesterday’s widespread declines. The common currency consolidated gains during European trading as German growth data met estimates and German business outlook surveys surprised to the upside.

EUR/GBP is trading in the region of 0.8341 and EUR/USD is trading in the region of 1.3494

Australian Dollar

In the wake of comments issued by Reserve Bank of Australia Governor Glenn Stevens regarding the possibility of currency intervention the ‘Aussie’ slid against its peers. The South Pacific asset closed Australasian trading weaker against the majority of its rivals.

AUD/GBP is trading in the region of 0.5667, AUD/EUR is trading in the region of 0.6817 and AUD/USD is trading in the region of 0.9193

New Zealand Dollar

Despite John McDermott (Assistant Governor of the Reserve Bank of New Zealand) asserting that the New Zealand Dollar is overvalued the ‘Kiwi’ advanced on the US Dollar during the local session. The commodity-driven asset was little changed against several of its other peers.

NZD/GBP is trading in the region of 0.5069, NZD/EUR is trading in the region of 0.6102 and NZD/USD is trading in the region of 0.8208

Canadian Dollar

Yesterday the Canadian Dollar eased to its lowest level since September as the decreasing odds of the Bank of Canada introducing a rate increase weighed heavily on the currency ahead of today’s domestic inflation data. Canadian CPI is forecast to fall below policy makers’ targets, potentially inspiring further ‘Loonie’ losses.

CAD/GBP is trading in the region of 0.5851, CAD/EUR is trading in the region of 0.7011 and CAD/USD is trading in the region of 0.9479

These exchange rates were correct as of 9:35 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.