Policy minutes push the US Dollar higher against the British Pound, while disappointing data helps the ‘Greenback’ rise against the Euro and Canadian Dollar.
Currency news
The US Dollar Exchange Rate was trading in the region of 0.7579 against the Euro as of 14:38 pm GMT
After the Federal Reserve published their latest FOMC meeting minutes yesterday the US Dollar experienced significant movement.
In the minutes the Fed indicated that the current pace of asset purchases may be slowed in the near-future.
After the news was released – and in light of the BoE’s more divided stance on stimulus – the British Pound dropped to the lowest levels seen since July 2010. Sterling later experienced an upward correction, steadily moving away from yesterday’s 2 ½ year low despite a UK report showing that British public borrowing has already hit 93.8 billion Pounds this fiscal year. With the UK economic outlook remaining fairly bleak industry experts are expecting the currency to either linger around its present rate of 1.5252 or weaken to trade within the region of 1.5100.
The Euro also fell against the safe-haven US Dollar today. An unexpectedly strong rate of contraction in German services and manufacturing sectors triggered widespread declines in the common currency. With investors upping the odds that the European Central Bank will be forced to hold borrowing costs at their lower level for longer than planned in order to boost recovery, the Euro shed 0.7 per cent against the ‘Greenback.’ The common currency is now trading below 1.32 against the US Dollar for the first time in six weeks.
For a fifth consecutive day the US Dollar was able to gain on the ‘Loonie’ as its Canadian counterpart turned bearish following declining commodity prices. With risk appetite on the wane crude oil, Canada’s most important export, dropped. The Canadian Dollar was also adversely affected by the news that jobless benefit claims rose in the US, boosting safe-haven assets like the ‘Greenback’. As one industry expert commented: ‘The Canadian Dollar has been caught in the updraft of US Dollar strength. On top of that, the bellwether commodities have been falling in the last couple of days.’ If tomorrow’s Canadian consumer price index disappoints the ‘Loonie’ could continue to slide against its American rival.
The US Dollar also gained on its broadly softening South Pacific counterparts. The New Zealand and Australian Dollar’s posted widespread declines as Asian stocks fell and New Zealand’s central bank intimated that it would step in to restrain the ‘Kiwi’s upward movement.
Economic news
Today Labour Department figures showed that US unemployment applications increased for the first time in three weeks in the week ending February 16th.
Although economists expected an increase, their estimate of 355,000 was 7,000 short of the actual result. This return to post-holiday levels indicates that the pace of hiring’s and firings has altered very little.
While a surge in hiring’s would be nice, the steady level of firings could be viewed as indicating that businesses are remaining relatively upbeat in what are still difficult economic conditions.
As senior Moody’s Analytics economist Ryan Sweet observes: ‘Businesses just seem to be sitting tight with regard to layoffs, which is reason for optimism. If we get through these hurdles over the next couple of months the job market should begin to improve more noticeably.’
The four-weekly moving average, which is less open to volatility, moved upwards from 352,750 to 360,750 but remained below the pre-holiday level.
A separate Labour department report revealed that the cost of living barely altered in January, and that over the past year the consumer-price index has increased by 1.6 per cent.
Current US Dollar Exchange Rates
The US Dollar to Euro (USD/EUR) exchange rate is trading at 0.7579
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trading at 0.6553
The US Dollar to Canadian Dollar (USD/CAD) exchange rate is trading at 1.0185
The US Dollar to Australian Dollar (USD/AUD) exchange rate is trading at 0.9754
The US Dollar to New Zealand Dollar (USD/NZD) exchange rate is trading at 1.1980
The US Dollar to Emirati Dirham (USD/AED) exchange rate is trading at 3.6730
The US Dollar to Swiss Franc (USD/CHF) is currently trading at 0.9319
The US Dollar to Japanese Yen (USD/JPY) exchange rate is trading at 93.1700
These exchange rates were correct as of 14:38 pm GMT
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