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GBP Steady before BoE, EUR Pressured as ECB Decision Looms, AUD Struggling

Published: 4 Dec at 1 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany,

Pound Sterling
Before the Bank of England (BoE) delivered its interest rate decision, the Pound was holding on to previous gains against the Euro and was little-changed against the US Dollar. As no alterations to fiscal policy are anticipated, Sterling movement may be limited today. That being said, the European Central Bank’s (ECB’s) policy statement could inspire volatility in the British currency.

US Dollar
The ‘Greenback’ could advance on its higher-risk currency counterparts today if the European Central Bank implies that it intends to shore up the Eurozone’s fragile economy with additional stimulus measures. US Dollar strength could also be derived from today’s US initial and continuing jobless claims figures. With the highly-influential US non-farm payrolls report scheduled for release tomorrow, a decline in the number of people applying for jobless benefits would be well received.

The common currency was trading in a narrow range against the majority of its counterparts today despite Germany’s Construction and Retail PMI’s showing improvement. Demand for the Euro remained muted ahead of the ECB interest rate announcement. Should the use of QE be alluded to, the Euro could post widespread losses.

Australian Dollar
The ‘Aussie’ has been struggling this week in the wake of a highly disappointing domestic growth report for the third quarter. As growth was shown to have slowed to 0.3% on a quarter-on-quarter basis – instead of accelerating to 0.7% as anticipated – industry experts are now betting that the Reserve Bank of Australia will cut interest rates in the near future. This speculation is keeping the Australian Dollar under pressure.

New Zealand Dollar
The New Zealand Dollar tracked its Australian relation lower overnight, with a potential drought in New Zealand and less-than-spectacular domestic house price data also taking a toll on the ‘Kiwi’. Before the weekend additional movement in the New Zealand Dollar could be triggered by news from the UK, US, Eurozone and Australia.

Canadian Dollar
As yesterday’s interest rate decision from the Bank of Canada alluded to stronger domestic growth, the Canadian Dollar was able to post modest gains against several of its main currency counterparts. Today’s Ivey Purchasing Managers Index may inspire additional ‘Loonie’ movement.
As of Thursday, 4th December 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2659, GBP USD exchange rate was 1.5679, GBP AUD exchange rate was 1.8697, GBP NZD exchange rate was 2.0156, and GBP CAD exchange rate was 1.7854.
Patrick James About Author: (289 Posts)Patrick completed his economics degree just as the global financial crisis struck in 2008. In the intervening years Patrick has made his mark, climbing to a prominent position within a large financial services provider. As part of his role Patrick uses his expertise to advise companies of the best ways to safeguard against currency risk.

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