The US Dollar strengthened to a three-week high against the Pound on Wednesday after the UK currency was weighed upon by a string of negative data releases and as the Dollar found support after Janet Yellen was nominated to succeed Ben Bernanke as head of the US Central Bank.
Sterling fell broadly after the Office for National Statistics published reports showing that industrial production in the UK fell by 1.1% in August, a figure far worse than the rise of 0.4% predicted by economists.
Manufacturing output also disappointed after the data showed a decline of 1.2% in the same month, well below the expected rise of 0.4%. On a year by year basis output fell by 0.2%, below the hoped for rise of 1%. The negative data has raised doubts over the growth outlook for the UK in the third quarter of the year.
The Pound is reversing gains that saw it jump 4.4% against the Dollar in September as improving economic data prompted investors to increase their bets that the Bank of England will raise borrowing costs earlier than it predicted.
The US Dollar meanwhile was bolstered by the news that President Barrack Obama will announce Federal Reserve vice Chairwoman Janet Yellen to become the Fed’s newest head. The news boosted expectations that the Federal Reserve could remain in favour of continuing with its monthly $85 billion quantitative easing programme.
The ‘Greenback’ remains under pressure however as the government shutdown drags on and as the deadline for a rising of the debt ceiling draws closer. As a result of the uncertainty caused by the political stalemate in Congress the US Dollar is the second worst performing currency this month. As the October 17th deadline draws closer the currency is likely to soften once again as investors are certain to get increasingly jittery.
The Federal Reserve is due to release the minutes from its September policy meeting at 19:00 Pm GMT
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6259
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7394
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0374
The US Dollar/ Australian Dollar Exchange Rate is currently in the region of: 1.0587
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2044
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 97.3640
The US Dollar/ South African Rand Exchange Rate is currently in the region of: 9.9961
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5976
The Euro/ US Dollar Exchange Rate is currently in the region of: 1.3524
(Correct as of 14:45 pm GMT)
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