The US Dollar strengthened against the Pound and soared against the Euro following the release of positive US GDP data and the announcement by the European Central Bank that it has cut interest rates to a new record low.
According to the US Commerce Department, GDP in the world’s largest economy expanded at an annual rate of 2.8% in the July to September quarter, its quickest pace since the third quarter of 2012. The figure was an improvement on the second quarters reading of 2.5% and beat forecasts for a rise of 2%.
The data shows that the US economy was doing well before it was affected by the 16-day government shutdown and fiscal impasse. Despite the positivity of the data the Federal Reserve is unlikely to alter its stance on when it will taper its $85 billion per month monetary easing programme.
“The Fed knows the calculation behind GDP and they will see the moderating trend, which is weaker than what the headline suggests they will take that into consideration. This is not a game-changer for people’s forecast for fourth-quarter GDP and the Fed’s policy outlook,” said Sam Bullard, senior economist at Wells Fargo Securities.
The Bank of England also announced its interest rate and policy decision. Policy makers chose to maintain interest rates and its monetary easing programme, a decision which was widely expected by the markets.
Against the Euro the ‘Greenback’ soared after the ECB took investors by surprise by slashing interest rates to a new record low of 0.25%. Comments made by ECB President Mario Draghi added to the single currency’s losses after he indicated that further monetary easing could be implemented. The Euro is now likely to fall further as the Bank attempts to bolster the flagging Eurozone economic recovery.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6222
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7397
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0547
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.7022
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0419
The Pound Sterling/ US Dollar Exchange Rate is currently in the region of: 1.6071
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3518
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9481
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9597
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8367
(Correct as of 15:30 pm GMT)
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