As the European session opened the US Dollar was already on the back foot, trading in the region of an eight-month low against the Pound. Then, during local trading the North American currency’s bearish relationship with its British cousin was exacerbated by disappointing domestic news.
The US Dollar Exchange Rate was trading in the region of 0.6286 against the Pound as of 14:45 GMT
In yet another sign that the Federal Reserve still faces significant hurdles in its race to get the US economy back on track, inflation in the world’s largest economy climbed by 0.1 per cent last month, the worst month-on-month result for three months. Economists were expecting a 0.2 per cent gain to mirror that recorded in July.
Core inflation also advanced by 0.1 per cent in August.
Year-on-year CPI increased by 1.5 per cent last month, down from the 2 per cent Y-o-Y increase posted the previous month.
The result reinforces that there is still a long way to go before inflation reaches the Federal Reserve’s 2 per cent inflation target.
The US Dollar to Pound (USD/GBP) Exchange Rate hit a low of 0.6275
Following the data’s publication HSBC economist Ryan Wang stated; ‘There’s still quite a bit of slack in the labour market, wage gains are positive but have been modest. The Fed is committed to defending their 2 per cent inflation goal from both sides, and currently inflation is running below that goal.’
The US Dollar was also weakened by the pressure of speculation surrounding the potential outcome of the FOMC gathering, and further movement is likely to be limited ahead of tomorrow’s announcement.
According to one industry expert; ‘People are staying on the sideline before the FOMC meeting. The Fed will probably reaffirm their forward guidance tomorrow that tapering isn’t tightening, interest rates are going to stay low.’
In terms of the USD/GBP pairing, further losses are likely. Tomorrow the Bank of England releases the minutes from its latest policy meeting and if the tone adopted is as encouraging as that expressed by BoE Governor Mark Carney last week, the Pound’s recent bullish behaviour may well continue.
Before the Fed makes its announcement tomorrow at 19:00 GMT investors will be taking an interest in US housing starts and building permits data.
US Dollar (USD) Current Exchange Rates
< Down > Up
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6286 <
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7488 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0696 <
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 99.1800 >
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0317 <
The Pound Sterling/ US Dollar Exchange Rate is currently in the region of: 1.5903 >
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3353 >
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: 0.9693 >
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8198 >
(Correct as of 14:45 GMT)
Comments are closed.