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Mon 15 Jul 2024 08:52GMT

US Dollar (USD) Suffers as Safe-Haven Demand Dwindles

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, China, France, Germany, Italy,

Pound Sterling (GBP)

The Pound (GBP) fell against many of its competitors today after the UK Markit manufacturing PMI fell for its seventh month in a row, leaving Sterling investors feeling increasingly jittery over the health of the British economy.

UK political developments also remained in focus, with markets becoming increasingly concerned over the prospects of a hung parliament on the 12th December general election.

US Dollar (USD)

The US Dollar (USD) was compromised by increasing market risk-appetite today after China’s manufacturing sector a showed a surprise recovery.

Today also saw the publication of the UK ISM manufacturing PMI for November, which contracted at 48.1, escalating concerns over America’s slowing economy amid US-China trade uncertainty.

Euro (EUR)

The Euro (EUR) held steady after November’s German Markit manufacturing PMI failed to show any signs of recovery, leaving European markets feeling jittery as the Eurozone’s powerhouse economy continues to struggle.

While the French and Italian manufacturing sectors showed some improvement, this was not enough to inspire confidence in the Eurozone’s flagging economy as a whole.

Australian Dollar (AUD)

The Australian Dollar (AUD) soared against the Pound (GBP) today after the Chinese manufacturing sector improved and buoyed market appetite for risky currencies like the ‘Aussie’.

Australian Dollar investors are looking ahead to tomorrow’s interest rate decision from the Reserve Bank of Australia (RBA), with any hawkish commentary about the Australian economy likely to further boost market confidence in AUD.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) also benefited from renewed market risk-appetite today, with China’s improving factory sector boost market confidence in the risk-sensitive ‘Kiwi’.

Canadian Dollar (CAD)

The Canadian Dollar (CAD) failed to benefit from the Canadian Markit manufacturing PMI for November today, which expanded at its fastest rate in nine months.

This was due to rising concerns over US-China trade negotiations as tensions between Beijing and Washington continue to hold back confidence in the trade-reliant Canadian economy.

As of Monday, 2nd December 2019, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1682, GBP USD exchange rate was 1.2939, GBP AUD exchange rate was 1.898, GBP NZD exchange rate was 1.9918, GBP CAD exchange rate was 1.7217, and GBP CNY exchange rate was 9.1079.
Dominic Lee About Author: (474 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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