The US Dollar is trading lower against the Pound and close to an eight-month low against the Euro in a day of subdued trading as investors increase their bets that the recent political turmoil in the States has harmed the US economy.
The two week long government shutdown and the debacle over the raising of the debt ceiling has caused investors to predict that the Federal Reserve will choose to postpone making cuts to its monetary easing programme.
“People are putting in place calls that the Fed may not taper until March, which is a significant change,” said Jane Foley, a senior currency strategist at Rabobank International in London, referring to a slowdown in the pace of the central bank’s asset purchases. “If China is growing nicely and the Fed is doing more stimulus, then it helps lift appetite for higher-yielding assets. The dollar should weaken.”
As expectations of the Federal Reserve cutting its easing programme demand for riskier assets improved. The Australian Dollar is on track to make a weekly gain against the ‘Greenback’, as is the New Zealand Dollar, Indian Rupee and many other emerging currencies.
“The very earliest you’d be looking at Fed tapering is March. There’s been a recovery in risk appetite and that’s seen flows into riskier assets and away from the US Dollar” said the chief economist at St. George Bank Ltd.
The ‘Greenback’ is also under pressure from the very real possibility that another US debt crisis will reoccur early next year after the deal reached on Wednesday failed to resolve the budget issues between the Republicans and Democrats.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6181
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7312
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0291
The US Dollar/ Australian Dollar Exchange Rate is currently in the region of: 1.0366
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1778
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 97.9261
The US Dollar/ South African Rand Exchange Rate is currently in the region of: 9.8429
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6176
The Euro/ US Dollar Exchange Rate is currently in the region of: 1.3675
(Correct as of 14:40 pm GMT)
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