Published: 5 Sep at 12 PM Tags: Euro, Dollar, America, Eurozone, USA, India,
With the US economic recovery appearing well underway and the odds of the Federal Reserve reigning in quantitative easing increasing with every piece of positive data, the â€˜Greenbackâ€™ is enjoying a bullish relationship with several of its most traded peers.
As well as strengthening beyond 100 Yen per Dollar for the first time since July, the US asset climbed close to a six week high against the Euro before the European Central Bank issued its rate decision.
Economists are forecasting that tomorrowâ€™s US non-farm payrolls report â€“ a major indicator of the state of the employment sector â€“ will show that the economy added 180,000 positions in August and the unemployment rate held at 7.4 per cent.
If forecast proves accurate it will certainly add to the case for the Federal Reserve tapering stimulus in September, an action which would bolster the US Dollar.
As senior currency strategist Kasper Kirkegaard observes, â€˜Itâ€™s very difficult to say anything negative about US data right now. We expect even more Dollar strength going into 2014. We donâ€™t think there will be any changes from the ECB today.â€™
However, while the US Dollar was able to advance on the majority of its peers during the European session, the safe-haven currency softened against the Rupee as the emerging-market asset enjoyed a surprising surge.
With the Reserve Bank of India
ushering in a new Governor yesterday, and swiftly adopting a firmer stance, the Rupee climbed by over 2 per cent before settling at around the 66.05 Rupee per Dollar level.
Governor Raghuram Rajan faces one hell of a challenge, but he seems determined to tackle it head on.
According to New-York based economics lecturer Eswar Prasad, â€˜The main problem right now is that monetary policy is being forced to undertake an almost impossible balancing act. A narrower set of mandates could improve the RBIâ€™s effectiveness.â€™
For Rajan, recovering fiscal stability and targeting inflation will be the primary goals in the months ahead.
As of Thursday, 5th September 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.188, GBP USD exchange rate was 1.5587, and GBP INR exchange rate was 103.2478.