Fed Seen Tapering Stimulus In March, US Dollar Falls

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Pound Sterling

The Pound begins the week having largely retained gains recorded against the US Dollar in the wake of positive UK retail sales and employment data. A report showing a 2.8 per cent month-on-month surge in national house prices lent the British asset further support overnight.

GBP/EUR is trading in the region of 1.1817 and GBP/USD is trading in the region of 1.6169

US Dollar

Now that the prospect of the Federal Reserve tapering stimulus before next spring has all but vanished, the appeal of the US Dollar has dimmed and investors have turned to higher-risk assets. Consequently, the ‘Greenback’ closed last week 1.0 per cent lower against the Euro and begins today’s European session under pressure. US existing home sales figures could provoke further US Dollar movement this afternoon.

USD/GBP is trading in the region of 0.6185 and USD/EUR is trading in the region of 0.7308

Euro

While today’s German producer price data and Bundesbank report could trigger modest Euro fluctuations, movement in the common currency is likely to be limited ahead of this week’s more influential economic news, including German/Eurozone manufacturing and services PMI.

EUR/GBP is trading in the region of 0.8461 and EUR/USD is trading in the region of 1.3682

Australian Dollar

After rallying last week the ‘Aussie’ reverses recent gains overnight investors bet that the South Pacific currency had been oversold. With Australian data lacking until Wednesday, additional movement in the nation’s Dollar is likely to be triggered by Chinese economic reports and US data.

AUD/GBP is trading in the region of 0.5983, AUD/EUR is trading in the region of 0.7069 and AUD/USD is trading in the region of 0.9670

New Zealand Dollar

Although a report revealed that credit card spending in New Zealand slowed in September, the South Pacific asset remained trading higher against the US Dollar and gained on its Australian rival as domestic net immigration climbed to its highest level for ten years.

NZD/GBP is trading in the region of 0.5250, NZD/EUR is trading in the region of 0.6205 and NZD/USD is trading in the region of 0.8487

Canadian Dollar

If today’s Canadian wholesale sales data shows greater improvement than the 1.5 per cent gain recorded in August the ‘Loonie’ could recoup some of its recent losses. The Canadian currency softened against the majority of its most traded peers last week as US shutdown drama and uninspiring domestic data weighed on the asset.

CAD/GBP is trading in the region of 0.6010, CAD/EUR is trading in the region of 0.7102 and CAD/USD is trading in the region of 0.9717

These exchange rates were correct as of 8:30 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.