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Pound Softer after Haldane Comments, US Dollar Bullish thanks to Fed

Published: 20 Mar at 9 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Greece,

Pound Sterling
After posting widespread declines on Wednesday in reaction to the UK’s disappointing employment figures and the Bank of England’s dovish meeting minutes, the Pound spent Thursday recovering ground against the Euro. Although the British currency also strengthened against the US Dollar, it gradually eased back towards its recent multi-year low as the BoE’s chief economist stated that the central bank is as likely to cut interest rates as raise them. Today’s domestic current account data could impact the Pound in the hours ahead.

The ongoing disintegration of the negotiations between Greece and its creditors put the Euro under strain in the European session. As European leaders gathered in Brussels to discuss the situation – yet again – the Euro declined against a number of its peers. The Eurozone’s current account numbers may influence the direction taken by the common currency before the weekend, but the Greek situation is likely to continue dominating focus.

US Dollar
The US Dollar staged an impressive rebound in the wake of the Federal Open Market Committee decision, advancing on a number of its most traded rivals. The Fed ditched the word patience from its interest rate rhetoric, indicating that a rate increase could be on the cards for June and boosting the appeal of the ‘Greenback’ in the process. Better-than-expected US initial jobless claims numbers also lent the US Dollar support.

Australian Dollar
Fluctuating commodity prices and the diverging policy paths of the Reserve Bank of Australia and the Federal Open Market Committee left the Australian Dollar trading in a weaker position this week. Influential Australian data is in short supply next week, but ‘Aussie’ movement could be triggered by global economic developments.

New Zealand Dollar
Although New Zealand published better-than-expected fourth quarter growth figures on Thursday, ‘Kiwi’ gains were limited due to the FOMC announcement and the week’s disappointing dairy price auction. Next week’s domestic trade balance and consumer reports could impact New Zealand Dollar trading.

Canadian Dollar
Given that the Bank of Canada recently asserted it would leave interest rates on hold for the foreseeable future, today’s Canadian inflation figures will be worth noting. A marked slowing in consumer price gains could force the central bank to reconsider its position and limit demand for the Canadian Dollar in the process.
As of Friday, 20th March 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3816, GBP USD exchange rate was 1.495, GBP AUD exchange rate was 1.9235, GBP NZD exchange rate was 1.9767, and GBP CAD exchange rate was 1.8767.
Dominic Lee About Author: (474 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.

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