The Federal Open Market Committee’s bound to be feeling the pressure as the world waits for the conclusion of its ongoing policy meeting. Speculation regarding whether this gathering will end in a reduction in US stimulus has been mounting for weeks, and whatever the outcome some parties are going to be dissatisfied with the result.
The US Dollar Exchange Rate was trading in the region of 0.6263 against the Pound as of 14:40 GMT
And the US Dollar’s been feeling the pressure too. Since the US non-farm payrolls report failed to meet expectations, upping the odds of the Federal Reserve adopting a dovish stance, the ‘Greenback’ has been trapped in a bearish relationship with several of its most traded rivals.
During the European session the US Dollar slumped at a two-week low against the Yen, a three-week low against the Euro and an eight-month low against a supported Pound.
In the hours leading up to the Fed announcement currency strategist Neil Mellor commented: ‘If they do go with tapering, and my gut feeling is they will, it will be offset by a number of mitigating observations. The knee-jerk reaction will be for a stronger Dollar. If they then throw in cushioning language I think the Dollar might resume its downtrend again.’
The US Dollar to Pound (USD/GBP) Exchange Rate hit a low of 0.6258
Less-than-impressive domestic data and encouraging Bank of England minutes have also weighed on the USD/GBP pairing today.
In the BoE minutes it became apparent that the central bank’s policy makers are in agreement when it comes to maintaining the current level of asset purchases. The report prompted this response from one London-based strategist; ‘There were two Pound positive takeaways from the statement. [The] BoE said recent stronger data presented an upside risk to the growth profile described in the August Inflation report. There was a little pushback against rising UK rates, as this rise had been accompanied by increasing signs of a recovery taking hold.’
In the latest in a stream of lacklustre US data, housing starts were shown to have increased by less-than-projected in August, rising by 0.9 per cent month-on-month rather than the 2.3 per cent expected.
Similarly, building permits unexpectedly declined by 3.8 per cent. Economists had forecast a fall of 0.4 per cent.
The ‘Greenback’ modestly extended declines after the data was published.
With the Fed’s announcement scheduled for 19:00 GMT the market could experience significant fluctuations during the North American session.
US Dollar (USD) Current Exchange Rates
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The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6263 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7492 >
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0697 >
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 98.9300 <
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0307 >
The Pound Sterling/ US Dollar Exchange Rate is currently in the region of: 1.5971 >
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3342 <
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9349 <
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9699 <
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8216 <
(Correct as of 14:40 GMT)
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