Exchange Rate Outlook: Slowing Eurozone Growth Triggers EUR/USD Declines

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Pound Sterling

After posting widespread gains yesterday following the publication of minutes from the latest Bank of England policy meeting the Pound was little changed against its main peers as the European session got underway. Sterling was close to a 10-month high against the Euro prior to the release of UK trade balance and factory order figures.

GBP/EUR is trading in the region of 1.1988 and GBP/USD is trading in the region of 1.6100

US Dollar

Hawkish minutes from the Federal Open Market Committee and stronger-than-anticipated US retail sales data saw the ‘Greenback’ recover losses overnight. The safe-haven asset advanced on peers like the Euro and Pound as Fed officials hinted at tapering easing in the near future. Today’s US initial jobless claims report could trigger further US Dollar movement.

USD/GBP is trading in the region of 0.6211 and USD/EUR is trading in the region of 0.7449

Euro

Following a mixed bag of services/manufacturing PMI reports for Germany and the Eurozone the Euro fluctuated against its peers. While German manufacturing jumped to an almost 2 ½ year high, growth in the Eurozone slowed for a second month in November, emphasising the fragility of the currency bloc’s return to growth.

EUR/GBP is trading in the region of 0.8340 and EUR/USD is trading in the region of 1.3452

Australian Dollar

With the Federal Reserve adopting a comparatively hawkish stance regarding the tapering of quantitative easing and Chinese manufacturing data failing to meet expectations the ‘Aussie’ lost ground against its US counterpart overnight. The Australian Dollar also slumped against several of its other main currency rivals.

AUD/GBP is trading in the region of 0.5822, AUD/EUR is trading in the region of 0.6929 and AUD/USD is trading in the region of 0.9297

New Zealand Dollar

The New Zealand Dollar dropped during Australasian trading as sliding Asian stocks, the increasing odds of the Federal Reserve tapering stimulus and disappointing manufacturing data for China lessened the appeal of the commodity-driven asset.

NZD/GBP is trading in the region of 0.5132, NZD/EUR is trading in the region of 0.6149 and NZD/USD is trading in the region of 0.8242

Canadian Dollar

After Stephen Poloz, Governor of the Bank of Canada, stressed the importance of maintaining domestic stimulus the ‘Loonie’ advanced on its peers. Gains against the US Dollar were limited however as a result of minutes from the latest FOMC policy meeting.

CAD/GBP is trading in the region of 0.5939, CAD/EUR is trading in the region of 0.7120 and CAD/USD is trading in the region of 0.9562

These exchange rates were correct as of 9:25 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.