SendMoney.org.uk

Compare exchange rates, send money abroad and online

Sat 31 Oct 2020 22:10GMT

US Dollar (USD) Subdued Ahead of Federal Reserve Interest Rate Decision

Published: 16 Sep at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany,

Pound (GBP)


The Pound (GBP) rose against its peers today after the later UK Consumer Price Index for August fell from 1.8% to 0.9%, buoying confidence in the British economy as it shows a steady return of activity.

Neil Birrell, the chief investment officer at Primier Miton, said of the report:

‘The inflation data in the UK surprised on the upside. The core year-on-year CPI was up 0.9% against expectations of 0.5%. Rising inflation has been much discussed as the inevitable consequence of all the stimulus being injected into the economy. Policymakers won’t be worried about this number, they are more likely to be pleased there is activity in the economy.’

Meanwhile, growing opposition to Prime Minister Boris Johnson’s controversial Brexit Internal Market Bill has provided a glimmer of hope for the British economy, for if the bill is overturned, the UK is more likely to secure a deal with the European Union ahead of December 31st.

Euro (EUR)


The Euro (EUR) remained relatively subdued today as single currency investors are becoming more cautious as a number of European countries re-introduce coronavirus restrictions. As a result, EUR traders are concerned that countries could face another set of lockdowns.

Nevertheless, the Eurozone’s economic outlook has improved following the latest German ZEW surveys, which pointed to an improvement in economic sentiment, despite a Brexit deadlock.

US Dollar (USD)


The US Dollar (USD) has been generally undermined by upbeat market mood this week, with hopes of a breakthrough in Covid-19 vaccines dampening demand for the safe-haven ‘Greenback’.

Instead, USD investors are bracing for this evening’s Federal Reserve interest rate decision.

While the bank is widely expected to hold interest rates at 0.25%, a dovish commentary from the Fed could buoy demand for the US Dollar as concerns grow over the global economy’s recovery from the coronavirus pandemic.

Canadian Dollar (CAD)


The Canadian Dollar (CAD) recently firmed on a rebound in oil after the WTI crude oil index climbed by almost 1%. As a result, the commodity-linked ‘Loonie’ benefited from a surge in one of Canada’s most lucrative exports.

Meanwhile, Canada’s inflation in August remained virtually flat, leaving ‘Loonie’ investors concerned for the nation’s economy going ahead.

Australian Dollar (AUD)


The Australian Dollar (AUD) has benefited from risk-on trade today, with hopes of a coronavirus vaccine continuing to grow.

However, in Australian economic news, today’s release of the HIA New Home Sales for August – which fell by -14.4% - has left some ‘Aussie’ investors worried about the nation’s economic recovery in the months ahead.

New Zealand Dollar (NZD)


The New Zealand Dollar (NZD) has also gained from Covid-19 vaccine hopes and an improved outlook or New Zealand’s unemployment forecast. The nation’s pre-election economic and fiscal updated lowered the unemployment forecast from 9.8% to 7.8%.

As of Wednesday, 16th September 2020, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.0979, GBP USD exchange rate was 1.2972, GBP AUD exchange rate was 1.7756, GBP NZD exchange rate was 1.9256, and GBP CAD exchange rate was 1.7087.
Dominic Lee About Author: (438 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.

Live Exchange Rates