Published: 4 Nov at 4 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany,
Sentiment strengthened towards the Pound today following the release of the UK Services PMI, which printed above forecast at 54.9. Indicating that the domestic service sector had continued to expand strongly in October this shored up hopes that Bank of England (BoE) policymakers will lean towards greater hawkishness at tomorrowâ€™s Rate Decision.
The single currency has been on a persistent downtrend today after Volkswagen admitted that 800,000 vehicles reported incorrect carbon dioxide emissions and fuel consumption levels. Dealing another blow to confidence in the carmaker and the wider German economy, this prompted traders to move away from the Euro. Further fines and recalls appear to be a strong possibility as the crisis deepens, with the outlook of the common currency likely to remain muted over the coming days.
Hopes have been shored up for a 2015 interest rate rise from the Federal Open Market Committee (FOMC) as the dayâ€™s ISM Non-Manufacturing Composite and ADP Employment Change figures proved stronger than anticipated. Of particular encouragement was the news that businesses had employed 182,000 new employees in October, which traders have taken to bode well for Fridayâ€™s more pivotal Change in Non-Farm Payrolls release.
Initially buoyed by a narrowed Australian trade deficit the antipodean currency has begun to shed gains this afternoon, undermined by the strength of the US Dollar. The increased likelihood of an imminent interest rate move from the Fed has weighed down the â€˜Aussieâ€™ today, with market risk aversion also taking its toll on the currency.
With the New Zealand Unemployment Rate having risen to 6% as forecast the â€˜Kiwiâ€™ was battered by the second successive slump in prices at last nightâ€™s GlobalDairyTrade auction. Indicating that underlying weakness remains in the nationâ€™s major export industry this did little to discourage suggestions that the Reserve Bank of New Zealand (RBNZ) could be inclined to cut interest rates at the December policy meeting. As such, investors were generally deterred from buying into the South Pacific currency.
Commodity weakness has also impacted the â€˜Loonieâ€™ today, with oil prices remaining in a downtrend. Wiping out the gains of the previous day, Brent crude has fallen back to $48.72 following a larger-than-expected rise of 2.8 million barrels in US stockpiles. Global supply glut fears remain a dominant pressure on the minds of traders, with no domestic data of note to offer support to the declining Canadian Dollar.
As of Wednesday, 4th November 2015, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.4164, GBP USD exchange rate was 1.5388, GBP AUD exchange rate was 2.1559, GBP NZD exchange rate was 2.334, and GBP CAD exchange rate was 2.0245.