A dovish statement from the Federal Reserve, coupled with a surprise decision to maintain the 85 billion Dollar level of monthly asset purchases, saw the US Dollar plummet against its peers overnight.
The ‘Greenback’ sank to multi-month lows against several of its most traded higher-risk rivals, notably hitting an eight-month low against the Pound.
The US Dollar Exchange Rate was trading in the region of 0.6227 against the Pound as of 16:00 GMT
However, during European trading a less-than-impressive UK retail sales report caused the Pound to soften and the USD/GBP pairing was able to recoup some losses prior to the release of influential US data.
Separate reports showed that less than expected initial US jobless claims were filed in the week ending September 13th , while the nation’s existing home sales unexpectedly advanced by 1.7 per cent in August (month-on-month). US leading indicators for August also climbed by 0.7 per cent rather than the 0.6 per cent forecast.
Economist Brian Jones said this in response to the jobless claims report; ‘The labour market is genuinely improving. Even if they’re working through the backlog, these numbers seem to have a little bit more behind them than just processing problems’. (Computer system alterations caused a backlog of applications).
The US Dollar to Pound (USD/GBP) Exchange Rate hit a low of 0.6191
Although the US employment sector is a major influence on Federal Reserve fiscal policy, the ‘Greenback’ continued to trade lower against the majority of its peers after the reports were published.
The Japanese Yen also suffered as demand for safe-haven assets dropped.
As well as hitting a 3 ½ year low against the Euro the Yen shed 1.4 per cent against the US Dollar.
According to currency strategist Lee Hardman, US Dollar weakness may persist in the days ahead; ‘With risk sentiment likely to continue to be supported in the very near term by this more dovish Fed policy outlook, that should keep low-yielding currencies like the Yen on the back foot along with the Dollar. Yen weakness is likely to be more concentrated against the most high-beta, high-risk currencies, particularly those of current account-deficit countries and emerging markets.’
With little influential US news scheduled for release tomorrow, UK public finance figures are likely to be responsible for the majority of movement in the USD/GBP pairing, while a Eurozone consumer confidence index could impact USD/EUR.
US Dollar (USD) Current Exchange Rates
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The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6227 >
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7382 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0534 >
The US Dollar/Japanese Yen Exchange Rate is currently in the region of: 99.4700 >
The US Dollar/Canadian Dollar Exchange Rate is currently in the region of: 1.0220 <
The Pound Sterling/ US Dollar Exchange Rate is currently in the region of: 1.6066 <
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3560 >
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9481 <
The Canadian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9785 >
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8405 >
(Correct as of 16:00 GMT)
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