Published: 23 Aug at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Canadian Dollar, USA, Canada, India,
After the minutes of the latest Federal Open Market Committee meeting were published on Wednesday and showed that the majority of policy makers were backing the plan to begin tapering easing before the end of the year, the US Dollar broadly strengthened, advancing on peers including the Yen and Euro.
The North American currency extended gains after a report released on Thursday showed that US initial jobless claims had fallen to their lowest levels for five years.
However, those advances were largely erased on Friday as US new home sales plunged by considerably more than expected.
While June’s new home sales figure was revised, sales dropped by a whopping 13.4 per cent in July, declining to an annualised pace of 394,000 – the weakest level since October 2012.
Economists expected a decline of -2.0 per cent.
After the data was published the US Dollar dipped against the Euro and Yen, lost ground against Sterling and pared an advance against the Canadian Dollar.
USD/GBP losses began earlier in the European session after the UK economy was shown to have expanded by more than expected in the second quarter, while USD/EUR declines were exacerbated by a report showing that consumer confidence in the Eurozone beat economists' expectations for improvement by climbing to -15.6 rather than the -16.5 expected.
But some industry experts are expecting that the prospect of the Fed tapering stimulus in September will help the US Dollar recoup losses swiftly.
Foreign Exchange strategist Greg Anderson commented: ‘New-home sales data was weak, but the existing-home sales was very good – there’s nothing that changes the FOMC general picture that the housing market continues to recover. Dollar/Canadian Dollar, Dollar/Yen certainly have shown a reversal of trends from the past 48 hours, although it might have been ripe for Friday afternoon profit taking anyway.’
Emerging market currencies like India
’s Rupee took advantage of the US Dollar’s blip and the USD/INR ends the week trading in the region of 63.2200.
As of Friday, 23rd August 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1635, GBP USD exchange rate was 1.5569, GBP CAD exchange rate was 1.6341, and GBP INR exchange rate was 99.8038.