The Pound climbed to a two-year high against the US Dollar as investors chose to widely ignore a positive business optimism report and instead look ahead to next week’s Federal Reserve policy meeting.
Following last week’s better than forecast jobs data and the continuing run of positive data releases there is a 50% chance that the Federal Reserve will announce that it will begin tapering its $85 billion per month monetary easing programme. Federal Reserve Bank of St Louis President James Bullard suggested that a cut could occur next week albeit a modest one due to too-low inflation.
“A small taper might recognise labour-market improvement while still providing the committee the opportunity to carefully monitor inflation during the first half of 2014. Should inflation not return toward target, the committee could pause tapering at subsequent meetings,” Bullard said yesterday.
Sterling was able to push higher after data showed that house prices climbed to their highest levels in more than a decade. Separate reports showed that the UK’s trade gap narrowed to a six-month low and industrial output increased for a second straight month.
Against the Euro the US Dollar fell to a six-week low after the single currency found support from the European Central Bank holding back from implementing monetary easing measures or negative interest rates at its December policy meeting.
Today’s speech by European Central Bank President Mario Draghi urged governments to finalise a banking union instead of hinting at negative rates.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6081
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7261
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0619
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6441
The Euro/ US Dollar Exchange Rate is currently in the region of: 1.3770
(Correct as of 14:30 pm GMT)
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