With three prominent Federal Reserve Bank Presidents delivering speeches in the US today, the will-they won’t-they speculation regarding the tapering of quantitative easing is piling the pressure on the ‘Greenback’.
The US Dollar Exchange Rate was trading in the region of 0.6229 against the Pound as of 15:50 GMT
While the safe-haven currency advanced last week after James Bullard, President of the Federal Reserve Bank of St Louis, intimated that the decision to refrain from tapering stimulus had been so close that an ‘Octaper’ could be on the cards, it shed those gains as the North American session opened.
During his time in the spotlight Fed Bank of New York President William C. Dudley asserted that policy makers need to adopt a forceful stance if the US economic recovery is to progress.
Dudley was quoted as saying; ‘The economy still needs the support of a very accommodative monetary policy. Improving economic fundamentals versus fiscal drag and somewhat tighter financial conditions are pulling the economy in opposite directions, roughly cancelling each other. [We need to see] evidence that the labour market has shown improvement [and] information about the economy’s forward momentum that makes me confident that labour market improvement will continue in the future’.
The US Dollar to Pound (USD/GBP) Exchange Rate hit a low of 0.6222
Bank of Atlanta President Dennis Lockhart also supported the Fed’s decision to maintain bond-buying at 85 billion Dollars. In his speech he argued that policymakers should be pouring their efforts into creating a more dynamic economy.
Also this afternoon the preliminary US Markit PMI declined from 53.1 in August to 52.8 in September, a three-month low. Economists were expecting a reading of 54.0.
In a statement published with the figures Markit economist Chris Williamson commented; ‘The flash PMI indicates that manufacturers enjoyed a further improvement in business conditions in September, suggesting the third quarter has on the whole seen stronger growth than the lacklustre performance seen in the second quarter. However, as far as policymakers are concerned there are some worrying signals in relation to the sector’s growth momentum, which vindicate the Fed’s decision to hold off on tapering its asset purchases.’
The US Dollar consequently weakened by 0.6 per cent against the Yen.
Additional ‘Greenback’ movement could occur after Federal Reserve Bank of Dallas President Dennis Lockhart makes his speech at 18:30 GMT.
The USD/GBP pairing is also likely to stay under pressure ahead of the release of this week’s final UK GDP reading for the second quarter. If the data proves that the nation’s economy expanded by 0.7 per cent in the last quarter, over double the growth registered in the first, the Pound could recoup losses sustained in the wake of the release of disappointing UK retail sales.
US Dollar (USD) Current Exchange Rates
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The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6229 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7415 >
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0596 <
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.7900 <
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0289 <
The Pound Sterling/ US Dollar Exchange Rate is currently in the region of: 1.6026 >
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3486 <
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9440 >
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9721 >
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8365 >
(Correct as of 15:50 GMT)
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