The Pound hit a three-week high against the US Dollar on Wednesday as speculation increased that the Bank of England will raise interest rates sooner-than-forecast and as inflation data in the US caused investors to increase their bets that Federal Reserve will delay tapering its monetary easing programme until 2014.
Earlier in the session the Bank of England released the minutes for its November policy meeting. The report showed that policy makers at the Bank believe that record low interest rates will need to continue even if unemployment in the UK hits their target of 7%. Economists largely ignored the minutes and instead took cues from last week’s jobs data which showed that the number of UK citizens out of work fell faster than expected.
“The broad story supporting Sterling is still intact while the minutes showed there was some discussion about not raising rates; I don’t think anyone particularly thought they would jump to hike anyway. It’s still clear that the economy has a lot of momentum and it’s clear that the direction for rates eventually is up,” said the head of strategy at Citigroup Inc.
The ‘Greenback’ fell against the Pound, after data showed that the cost of living in the US fell for the first time in six months, slipping further away from the Federal Reserve’s target. According to the Labour Department the consumer price index fell to -0.1%, down from the previous month’s figure of 0.2%. The slowdown in inflation caused investors to raise their bets that the Fed will refrain from tapering its $85 billion per month quantitative easing programme which weakened the Dollar.
The Dollar was able to make gains against the Euro and hit a session high after it found support from better than expected retail sales data. The Commerce Department said that sales climbed by 0.4% in October, beating the 0.1% expected by forecasters.
Against the Canadian Dollar the ‘Greenback’ softened as the ‘Loonie’ made gains on the back of Federal Reserve Chairman Ben Bernanke’s speech which supported the continuation of the Fed’s easing programme. The currency’s gains are likely to be tested by a speech from Bank of Canada Governor Stephen Poloz to a Senate Committee on Banking, Trade and Commerce which is expected to expand on the need for an accommodative monetary policy.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6201
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7396
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0461
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6124
The Euro/ US Dollar Exchange Rate is currently in the region of: 1.3520
Current Canadian Dollar (CAD) Exchange Rates:
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9558
The Canadian Dollar /Euro Exchange Rate is currently in the region of: 0.7070
The Canadian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5928
The Pound Sterling/Canadian Dollar Exchange Rate is currently in the region of: 1.6868
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0461
The Euro/Canadian Dollar Exchange Rate is currently in the region of: 1.4144
(Correct as of 14:30 pm GMT)
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