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Fri 21 Feb 2020 08:31GMT

Pound Weaker after Construction PMI, US Dollar Gains on Interest Rate Comments

Published: 2 Dec at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada,

Pound Sterling
Over the course of the European session the Pound Sterling exchange rate fluctuated in response to a disappointing UK Construction PMI report. The index of construction output fell to its lowest level in more than a year in November. If tomorrow’s UK Services PMI also falls short of expectations further Sterling losses could be accrued. However, if the index shows improvement (as forecast) the British currency may rally.

US Dollar
On Tuesday the US Dollar advanced on several of its most-traded currency counterparts after an official from the Federal Reserve asserted that the central bank is moving closer to altering its interest rate rhetoric. The safe-haven asset was also supported by a stronger-than-anticipated US Construction Spending report.

Euro
The Euro remained under pressure over the course of the European session as the steeper-than-expected decline in the Eurozone’s Producer Price Index left investors betting that the European Central Bank will have to introduce more hard-line stimulus measures when it gathers later this week. Tomorrow’s retail sales report for the currency bloc could give the Euro a boost if it shows an increase in consumer spending.

Australian Dollar
Although the Australian Dollar initially strengthened in the wake of the Reserve Bank of Australia’s interest rate decision (at which interest rates were left on hold and the fiscal statement unaltered), the currency later dropped by 0.5% against the US Dollar. Australia is due to publish its Services index and growth figures for the third quarter during the local session. Should these reports impress, the Australian Dollar could advance.

New Zealand Dollar
While New Zealand’s Commodity Price data initially caused New Zealand Dollar declines, the South Pacific currency experienced fairly minimal movement on Tuesday. The measure of Commodity Prices fell by -1.6% in November, following a 0.8% decline in October.

Canadian Dollar
A lack of domestic data left the Canadian Dollar trending in a narrow range against the majority of its currency counterparts during the North American session. However, tomorrow’s Bank of Canada rate decision could spark volatility.
As of Tuesday, 2nd December 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2631, GBP USD exchange rate was 1.5646, GBP AUD exchange rate was 1.85, GBP NZD exchange rate was 2.0061, and GBP CAD exchange rate was 1.7841.
Dominic Lee About Author: (393 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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