The US Dollar slipped to a two-month low against the Pound before recovering some ground on Wednesday as investors await the release of the minutes for the Federal Reserve’s July policy meeting.
The minutes due for release at 7:00 pm GMT have dominated market sentiment over the past few days as investors withdraw cash from riskier assets in preparation for any hint as to when the Fed will begin tapering its $85 billion a month monetary easing programme.
Sterling got a boost against the Dollar after a private sector report released on Wednesday showed that UK manufacturing orders hit a two-year high in August, adding to the sense of optimism surrounding the UK economic recovery.
Against the Euro the ‘Greenback’ made limited gains but edged lower against the Japanese Yen on investor concerns over the Fukushima Nuclear reactor. The Yen was supported by safe haven demand after the Japanese Nuclear Regulation Authority raised the severity level of a radioactive leak from the site. It raised the danger level from one to three out of seven. As the afternoon wore on however the Dollar regained its lost ground and once again went higher against the Yen.
The US Dollar rallied for a third day against the Australian and New Zealand Dollars due to speculation that a reduction in the Fed’s monetary easing programme will cause funds to flow out of higher yielding assets, an action that is already happening in the case of the South African Rand and Indian Rupee.
“The markets were definitely leaning more towards tapering and that it’s going to happen soon. If we see a debate going on in the minutes, which is very likely, and the markets will interpret it as being more hawkish, and we’re more likely to see the Dollar strengthen” said a foreign exchange strategist at Mizuho Bank.
Current US Dollar (USD) Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6383
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7467
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.1096
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 97.4354
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0439
(Correct as of 14:45 pm GMT)
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