Published: 3 Sep at 5 PM Tags: Euro, Dollar, America, Eurozone, Australian Dollar, Canadian Dollar, Australia, USA, Canada, Russia,
Ahead of the release of an influential manufacturing report for the US, the nationâ€™s Dollar climbed against its rivals, hitting a seven-week high against the Euro.
However, the â€˜Greenbackâ€™ fluctuated against the Yen as Middle Eastern tensions erupted once more and investors briefly flocked to safe-haven assets.
As President Barack Obama continues to seek congressional approval for a strike on Syria, a missile launch (detected by a Russian tracking system) sparked fresh concerns.
According to the Israeli Defence Minister, the missile launch was just a test, but it was enough to spook markets.
The US Dollarâ€™s advance on its peers was also aided by the expectation that todayâ€™s US manufacturing report will show improvement, supporting the case for the Federal Reserve tapering quantitative easing this month.
As foreign-exchange strategist Christian Lawrence states: â€˜Dollar strength is definitely a combination of concerns over Syria and expectations of tapering. Weâ€™re still structurally bullish on the Dollar on the back of Quantitative Easing tapering.â€™
The â€˜Greenbackâ€™ retained gains as US manufacturing was shown to have expanded more rapidly than expected.
The August gain marked the fastest rate of expansion since mid-2011 and took the gauge to 55.7 from 55.4 in July. Economists expected the gauge to come in at 54.
In response to the data senior Ameriprise Financial economist Russell Price stated: â€˜Demand for manufactured goods, whether it is automobiles or household goods or even business equipment, seems to be improving. Thatâ€™s giving a boost to the sector. As Europe stabilizes and demand improves there, itâ€™ll be a benefit to US exports.â€™
US construction spending also rose, advancing 0.6 per cent in July month-on-month rather than the 0.4 per cent predicted.
Meanwhile, Syrian fears boosted crude oil futures and supported commodity-driven currencies like the Canadian and Australian Dollarâ€™s.
As of Tuesday, 3rd September 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1817, GBP USD exchange rate was 1.5561, GBP AUD exchange rate was 1.718, GBP CAD exchange rate was 1.6396, and GBP RUB exchange rate was 52.0451.