Fed Shocker Sees US Dollar Plummet

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Pound Sterling

After the Federal Reserve defied the expectations of industry experts and left bond purchases un-tapered, the Pound advanced on the ‘Greenback’ to hit a high of $1.6163. If today’s UK retail sales figures follow the recent trend of surprising to the upside the Pound could extend its advance in the hours ahead.

GBP/EUR is trading in the region of 1.1915 and GBP/USD is trading in the region of 1.6123

US Dollar

With the Federal Reserve surprising markets by maintaining bond purchases at 85 billion Dollars investors turned from safe-haven assets and the ‘Greenback’ broadly softened. The US Dollar posted notable declines against several of its higher-risk rivals, and if today’s US initial jobless claims data also fails to meet forecasts the North American asset could fall further.

USD/GBP is trading in the region of 0.6201 and USD/EUR is trading in the region of 0.7390

Euro

Overnight the Euro strengthened to a seven-month high against the US Dollar as a result of the Federal Reserve’s unexpected decision and posted a modest gain against the Pound. However, if today’s UK retail sales report delivers a positive surprise the EUR/GBP pairing could resume its bearish relationship.

EUR/GBP is trading in the region of 0.8392 and EUR/USD is trading in the region of 1.3530

Australian Dollar

Ongoing concerns regarding the likelihood of the Reserve Bank of Australia issuing a rate cut before the end of the year saw the ‘Aussie’ soften during Australasian trading despite the boost higher-risk assets received from the Fed’s surprising stimulus decision. The South Pacific asset declined against peers including the US Dollar and Pound.

AUD/GBP is trading in the region of 0.5894, AUD/EUR is trading in the region of 0.7023 and AUD/USD is trading in the region of 0.9519

New Zealand Dollar

During the local session the ‘Kiwi’ rallied to a four-month high against the US Dollar as New Zealand posted economic growth of 0.2 per cent in the second quarter and the Fed opted to continue with its current level of asset purchases. The New Zealand Dollar also surged against a broadly softening Yen.

NZD/GBP is trading in the region of 0.5209, NZD/EUR is trading in the region of 0.6204 and NZD/USD is trading in the region of 0.8400

Canadian Dollar

Ahead of the publication of this week’s most significant Canadian news – domestic inflation figures – the ‘Loonie’ is achieving close to a three-month high against its US rival. The commodity-driven asset gained on its peers after the Federal Open Market Committee’s highly anticipated announcement and opened European trading stronger against the Pound.

CAD/GBP is trading in the region of 0.6077, CAD/EUR is trading in the region of 0.7241 and CAD/USD is trading in the region of 0.9797

These exchange rates were correct as of 09:10 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.