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Pound (GBP) Bullish Following Carney?s Statements, Eurozone Recovery Faltering, US Dollar (USD) Strong

Published: 18 Aug at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, France, Germany, Italy, Russia, South Africa,

Pound (GBP)

The Pound (GBP) has reached session highs of 1.6738 against the US Dollar on Monday, following a seemingly more hawkish Bank of England. Governor for the Bank of England, Mark Carney, has stated that economists need not be concerned with wage growth as an indicator for the UK interest rate hikes. Foreign exchange expert Adam Myers stated: ‘The comments in the (Sunday) Times were definitely a surprise to markets and that’s what is behind this move this morning.’ The Pound may be influenced further tomorrow with the publication of the Consumer Price Index and Retail Price Index.

Euro (EUR)

The Euro (EUR) is appearing a fragile commodity in the currency market of late, thwarted by geopolitical tensions, other bullish majors and a seemingly fragile Eurozone recovery. With Italy entering a third recession, France struggling to economically expand, and the most influential economy- Germany, faltering with poor data releases. An expert in the field Nicholas Spiro stated: ‘It’s fairly clear that the Eurozone recovery is coming apart at the seams.’ The Euro is presently trading between the boundaries of 1.3379 and 1.3400 versus the US Dollar (USD).

US Dollar (USD)

The US Dollar (USD) will see the publication of the US Housing Market Index, which may play a small factor in any shift in the US Dollar’s position in the currency market. The US Dollar however will be awaiting the release of US Consumer Price Index figures on Tuesday, alongside Building Permits and Housing Starts figures. The Dollar is presently remaining firm against the Pound (GBP) which has seen gains following a change in stance from the Bank of England’s remarks on Sunday. The US Dollar is currently trading at 0.5975 versus the Pound (GBP); conversely it also rests at 1.2497 against the Euro (EUR).

Canadian Dollar (CAD)

The Canadian Dollar (CAD) is presently trading at 0.5491 up against the Pound (GBP) whilst also trending at 0.9189 versus its US Dollar (USD) counterpart. The Canadian Dollar saw great fluctuation last week following the re-publication of data that suggested the Canadian economy had only created 200 jobs in the job market. Furthermore, the actual figure beat economists’ expectations of 20.0K, instead rocketing to a highly favourable 41.7K. As a result the ‘Loonie’ shot up in the currency market. Expert in the field Colin Cieszynski stated: ‘Trading swings are driven by surprises and deviations from expectations. So even though full time jobs were still soft the surprise was positive (not as bad as previously reported) sparking the rally in the “Loonie.”’

Australian Dollar (AUD)

Monday has seen the release of Australian New Motor Vehicle Sales, which has fallen by 1.3% in July month-on-month; June’s figure saw a growth of 2.2%. Although such data isn’t hugely influential it is used as a measure for the economic health of consumers within Australia, as a judgement of personal spending on large items. Tomorrow will see the release of the Reserve Bank of Australia’s latest meeting minutes which may encourage a boost for the Australian Dollar (AUD) if favourable. The present ‘Aussie’ to Pound (GBP) exchange rate is trending in the region of 0.5570.

New Zealand Dollar (NZD)

The New Zealand Dollar (NZD) to Pound (GBP) exchange rate is currently trading at 0.50717 in the currency market. The New Zealand Dollar has faced headwinds of late as a commodity currency, following the falling of dairy prices in New Zealand and tensions between Russia and Ukraine causing volatility in the currency market. The ‘Kiwi’ however is sinking lower against the US Dollar (USD)—presently at 0.8482—as the US Dollar remains bullish in the currency market. Any strengthening in the US Dollar will encourage the New Zealand Dollar to fall lower.

South African Rand (ZAR)

At present the Pound (GBP) is trading up against the South African Rand at 17.7709, following a prolonged period of volatility as a result of strike action in the South African economy, and a renewed hope rippling through the currency market that UK interest rates could appear sooner than expected. Wednesday will see the release of South African Inflation Rate figures, which may influence the Rand somewhat in the currency market.
As of Monday, 18th August 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2517, GBP USD exchange rate was 1.6723, GBP AUD exchange rate was 1.7937, GBP NZD exchange rate was 1.9754, GBP CAD exchange rate was 1.8212, GBP RUB exchange rate was 60.3347, and GBP ZAR exchange rate was 17.7418.
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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