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Pound Weaker after GDP, US Dollar Boosted by Decade-Strong Growth

Published: 23 Dec at 5 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, France, Greece, Italy,

Pound Sterling
The expansion of the UK’s current account deficit raised concerns regarding the strength of the nation’s economic recovery and the Pound accordingly softened against almost all of its most traded currency counterparts. Sterling is likely to trend in a narrow range until after Christmas.

US Dollar
On Tuesday the US Dollar was able to advance on rivals like the Euro, Pound and Australian Dollar thanks to an unexpectedly upbeat third quarter growth report. The pace of expansion in the US was shown to be at its strongest level for more than a decade (5.0%). Although an unexpected drop in US durable goods orders limited the ‘Greenback’s gains, the USD/GBP pairing managed to achieve a 15-month high.

The Euro was little-affected by the day’s ecostats for the currency bloc – French third quarter growth figures and Italy’s retail sales report. However, the common currency did come under pressure following the second presidential vote in Greece. Once again, the nominee supported by Prime Minister Antonis Samaras failed to secure the backing he needed. The third and final vote will be held on the 29th and could prompt Euro movement.

Australian Dollar
Ahead of the release of Australia’s Conference Board leading index, the Australian Dollar was trending in a narrow range against the majority of its peers. Although the report could cause some ‘Aussie’ fluctuations, movement will be limited with markets soon to close for the Christmas break.

New Zealand Dollar
The news that New Zealand’s trade deficit narrowed by more than expected (shrinking to its smallest for four years) bolstered the ‘Kiwi’ and helped the commodity-driven currency advance on the ‘Aussie’, ‘Greenback’ and Pound. The New Zealand Dollar could hold on to much of its gains until after the Christmas period.

Canadian Dollar
Canada’s GDP report for October surprised to the upside on Tuesday, giving the Canadian Dollar a boost in the process. The nation’s economy was shown to have expanded by 0.3% on the month rather than the 0.1% expected. While the annual figure of 2.3% was down from 2.4%, it too beat expectations for a reading of 2.1%.
As of Tuesday, 23rd December 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2749, GBP USD exchange rate was 1.5521, GBP AUD exchange rate was 1.9141, GBP NZD exchange rate was 2.0124, and GBP CAD exchange rate was 1.8034.
Laura Parsons About Author: (360 Posts)Laura works in the financial sector as a currency analyst, studying the latest global economic developments and assessing their impact on the foreign exchange market. Laura uses her currency knowledge to write articles focussing on market movements and trends for several independent financial websites.

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