The US Dollar weakened to a one-week low against the Pound following the release of a better than expected Services Purchasing managers index and as the USA’s trade gap widened in July.
According to the Washington based Commerce Department the nation’s trade gap increased by 13.3% to $39.1 billion, up from the $34.5 billion recorded in June, which was the smallest deficit since 2009. Economists had predicted a rise but only one for $38.6 billion. The reason for the rise was the rebound in imports and a cooling of exports. Imports increased by 1.6% to $228.6 billion, as oil and auto shipments rose. Exports slipped 0.6% to $189.4 billion. Companies shipped fewer capital goods, such as civilian aircraft and industrial engines
The wider trade gap suggests that US consumers and businesses are opting to spend more on foreign goods than US companies are earning from exports overseas. The widening of the trade gap comes not long after the US government said that consumer spending slowed in July. The reports have raised concerns that the nation’s economic expansion could begin to slow in the third quarter of the year.
Against the Euro the ‘Greenback’ held steady as continuing concerns over military action against Syria continued to support demand for the safe haven Dollar.
Investors are now looking ahead to Friday’s highly-anticipated U.S. nonfarm payrolls report which is seen as key to the Fed’s decision on tapering. If the figure shows that unemployment fell further then we can expect the Dollar to rally to new highs as expectations will surely increase that the Fed will choose to taper its easing policy when policy makers meet later this month.
Current US Dollar (USD) Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6406
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7591
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.1092
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 99.4110
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0507
(Correct as of 14:40 pm GMT)
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