As the European session opened the Pound extended declines to brush a five-week low against the Euro and softened against a broadly stronger US Dollar.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.5948 as of 12:55 GMT.
The British asset continued to feel the pressure in the aftermath of yesterday’s disappointing industrial/manufacturing production and trade balance figures ahead of the Bank of England’s rate decision.
Meanwhile, renewed speculation regarding the Fed tapering quantitative easing, coupled with increasing hopes that lawmakers will end the Federal shutdown, bolstered the ‘Greenback’ at Sterling’s expense.
Before the BoE made its policy announcement currency strategist Jane Foley noted; ‘It’s all steady as far as BoE policy goes, the bank has been quite vocal over the past couple of months on the policy. The Dollar is going higher because there’s some optimism that there could be a temporary extension to the debt ceiling in Washington. There’s potential for Sterling to go back down’.
After the UK central bank opted to hold rates and maintain the current level of asset purchases the Pound was little affected.
1 US Dollar is currently worth 0.6273 pence
The BoE’s decision was in line with economists’ forecasts.
The Pound has been on the back foot since last week, when investors speculated that the rally which pushed it to multi-month highs against peers like the US Dollar and Euro was excessive, and has been declining steadily against the ‘Greenback’ since Monday.
In response to Sterling’s bearish relationship with its main rivals, one forex expert commented; ‘The Pound has been an out-performer among the G-10, but we believe it has reached over-extended levels. We expect the Pound to come under pressure.’
If the Federal shutdown does end and US lawmakers manage to avoid a potentially disastrous default, weight certainly will start piling up on the Pound.
Before the weekend further Sterling movement could occur in response to UK construction output data. US developments and German inflation data may well be responsible for extra market movement.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5948 <
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1782 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6897 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9306 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6273 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8488 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5917 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5176 <
(As of 12:55 GMT)
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