Pound to Euro, US Dollar exchange rate: The Pound fluctuated in a tight half-cent range against the Euro

The Pound fluctuated in a tight half-cent range against the Euro on Friday as speculation of a Spanish bailout package and a delay to Greece's aid payment left markets in limbo.The Pound fluctuated in a tight half-cent range against the Euro on Friday as speculation of a Spanish bailout package and a delay to Greece’s aid payment left markets in limbo

Headlines

UK Public Borrowing deficit grows – slightly less-than-expected.
Will she or won’t she? – confusion over the Spanish and Greek aid deals.
Canadian CPI falls – interest rate hike less likely.
GBP/USD reaches yearly high – key resistance around 1.6300.

Sterling

On Friday the UK posted its worst budget deficit figures on record for the month of August as tax revenues declined due to the recession. The Public Sector Net Borrowing deficit grew to £12.4 billion heaping pressure on George Osborne’s debt-reduction drive. However the result was slightly better than economists had predicted and therefore Sterling was not heavily punished for the UK economy’s short-falling.

Euro

The Pound fluctuated in a tight half-cent range against the Euro on Friday as speculation of a Spanish bailout package and a delay to Greece’s aid payment left markets in limbo. With little ecostat releases of note traders were preoccupied with political matters, and with little decisive action forthcoming GBP/EUR remained relatively stable.

A rumour entered circulation that the Troika report into Greece’s finances could be delayed until after the US elections, but senior government officials in Athens responded sternly to give the Hellenic nation hope of a decision within the next few weeks. Greece’s next aid package, worth €31 billion, will not be released until the team of officials from the EU, IMF, and Eurogroup agree that the government has met its targets. It is crucial for Greece to obtain the funds in order to stay in the Eurozone and for this reason any delays could damage sentiment surrounding the single currency.

US Dollar

Sterling stampeded ahead against the US Dollar reaching a yearly high of 1.6310 on Friday morning in response to the slightly better-than-expected UK Public Borrowing figures. However significant resistance levels around the 1.6300 mark ensured that GBP/USD slid back down to consolidate at around 1.6240 over the weekend.

Risk appetite, which often dictates the direction of the US Dollar, was slightly improved on Friday as hopes of European Central Bank intervention in the sovereign bond market were boosted by speculation that Madrid is preparing for a new round of austerity measures. If implemented, the latest round of cuts would make it possible for the ECB to start buying-up short-dated Spanish debt in order to reduce the cost of borrowing for the embattled nation.

Canadian Dollar

The headline Canadian inflation Consumer Price Index figure for August declined from 1.3% to 1.2% as natural gas costs declined by -14%. The second consecutive month of weakening CPI figures reduced the likelihood of a Bank of Canada interest rate hike and subsequently the Pound gained around half a cent against the Canadian Dollar. However GBP/CAD did not beat Thursday’s 2-month high of 1.5888.

Australian Dollar

The Australian Conference Board Leading Index, released early on Friday morning, showed that short to mid-term growth forecasts in the Australian economy dropped from 0.5% to 0.0% during July. However September’s Flash Business Sentiment Indicator for China, Australia’s most lucrative export destination, mildly improved to a score of 50.31, compared to 47.54 the previous month. All in all the Pound to Australian Dollar exchange rate improved by a measly 10 pips during Friday’s session.

New Zealand Dollar

Although Credit Card Spending for August increased at an annualised 1.9% compared to the previous month’s meagre 0.1% improvement, the New Zealand Dollar found itself unsupported on Friday as traders sought to consolidate their positions following a solid fortnight of gains. The ‘Kiwi’ Dollar had been trading well against the Pound due to the Fed’s latest monetary stimulus but slumped to a 0.5 cent daily loss on Friday.

Data Released Today

08:00 EUR German IFO – Business Climate (SEP)

08:00 EUR German IFO – Current Assessment (SEP)

08:00 EUR German IFO – Expectations (SEP)

Related posts:

  1. Pound to Euro Exchange Rate Forecast: The Pound to Euro exchange rate fluctuated within a tight one-cent range
  2. Pound to Euro, US Dollar exchange rate: The Pound grew by around half a cent against the Euro
  3. Pound to Euro, US Dollar exchange rate: The Pound lost out on half a cent to the US Dollar
  4. Pound to Euro, US Dollar exchange rate: Sterling was able to push ahead on Friday and post a 1.25 cent gain
  5. The past week has seen the GBP CAD exchange rate trading within a relatively tight range

Article source: http://feedproxy.google.com/~r/ForeignExchangeOutlook/~3/pzn2LzP9m7A/

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