Exchange Rate Outlook: GBP/USD Rallies on House Price Surge

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Pound Sterling

As a report showed that UK house prices continued to climb the Pound rose against peers like the US Dollar and Pound. While Sterling might slip if UK industrial/manufacturing production data reveal a decline in output as expected, UK trade balance and GDP figures could inspire further Pound movement.

GBP/EUR is trading in the region of 1.1947 and GBP/USD is trading in the region of 1.6428

US Dollar

As the European session opened the US Dollar declined against both the Euro and Pound as the currencies were boosted by positive domestic data. However, the ‘Buck’ was able to retain gains against peers like the Yen as a Federal Reserve official announced that he believes tapering should occur as swiftly as possible.

USD/GBP is trading in the region of 0.6079 and USD/EUR is trading in the region of 0.7273

Euro

While the common currency began the week in a strong position against the US Dollar following the release of upbeat French manufacturing production data the Euro could decline in response to Italian GDP figures. The report is expected to confirm that the nation’s economy contracted by 0.1 per cent in the third quarter.

EUR/GBP is trading in the region of 0.8370 and EUR/USD is trading in the region of 1.3749

Australian Dollar

As the likelihood of the Federal Reserve tapering stimulus increased in the aftermath of a speech given by a Fed official, the ‘Aussie’ lost ground against the US Dollar. A smaller-than-forecast retail sales gain in China also weighed on the Australian Dollar and saw the South Pacific asset edge lower against rivals like the Pound.

AUD/GBP is trading in the region of 0.5535, AUD/EUR is trading in the region of 0.6610 and AUD/USD is trading in the region of 0.9089

New Zealand Dollar

Although the ‘Kiwi’ was knocked by China’s disappointing retail sales report, the currency was boosted by a stronger-than-forecast domestic card spending report and was trading close to a five-year high against the Australian Dollar as the local session came to an end. Further New Zealand Dollar movement may be limited ahead of tomorrow’s Reserve Bank of New Zealand rate decision.

NZD/GBP is trading in the region of 0.5036, NZD/EUR is trading in the region of 0.6027 and NZD/USD is trading in the region of 0.8278

Canadian Dollar

With Fed officials like James Bullard supporting the case for the Federal Reserve tapering stimulus this year the US Dollar broadly strengthened and the Canadian Dollar tumbled to an almost three-year low against the ‘Greenback’. The ‘Loonie’ was also adversely affected by a disappointing Canadian housing starts report. UK developments are likely to drive CAD/GBP movement in the hours ahead.

CAD/GBP is trading in the region of 0.5721, CAD/EUR is trading in the region of 0.6836 and CAD/USD is trading in the region of 0.9400

These exchange rates were correct as of 9:20 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.