As 2013 nears its close and policymakers prepare to tie economic loose ends, currencies like the US Dollar are experiencing notable movement. With the prospect of the Federal Reserve tapering stimulus before the end of the year almost a reality the ‘Buck’ is enjoying a bullish relationship with several of its main rivals.
The US Dollar to Pound Sterling Exchange Rate was trading in the region of 0.6144 as of 14:55 GMT
During the European session the US Dollar recovered recent losses against the Pound as Sterling slumped in response to the UK’s consumer price index.
News that UK inflation slowed to its lowest level in four years saw Sterling edge lower against its North American counterpart, but the US Dollar fluctuated against the Euro prior to the start of the Federal Open Market Committee’s two-day policy meeting.
New York-based currency strategist Robert Lynch said this of the upcoming FOMC decision; ‘The market seems to be divided on whether the Fed will taper now. But it’s more complicated than that. There’re other measures they can take in terms of forward guidance, putting on parameters on QE to counter the perceived hawkish elements of tapering’.
However, according to another industry expert; ‘It is more likely that the Fed will decide to taper this week than markets think. The initial reaction to taper will probably be Dollar buying.’
The US Dollar to Pound (USD/GBP) Exchange Rate hit a low of 0.6121
As policy makers assembled for 48 hours of discussion the US Dollar experienced modest movement, although the currency was largely unaffected by a report showing that falling fuel prices led to the cost of living in the US holding steady in November.
Labour Department figures showed that the nation’s consumer price index was unchanged in November after falling by 0.1 per cent in October.
Given that the result shows that inflation is still far away from the Fed’s target level it could have an impact on the central bank’s decision regarding tapering asset purchases.
Last week Fed official James Bullard stated that if stimulus was tapered ‘should inflation not return toward target, the committee could pause tapering at subsequent meetings.’
Tomorrow GBP/USD movement is likely to occur as a result of UK employment figures, but until the FOMC delivers its announcement fluctuations might be slightly restrained.
US Dollar (USD) Current Exchange Rates
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The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6144 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7267 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.1230 >
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 102.9700 <
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0593 <
The Pound Sterling/ US Dollar Exchange Rate is currently in the region of: 1.6276 <
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3758 <
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.8906 <
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9441 >
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8269 >
(Correct as of 14:55 GMT)
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