Sterling, US Dollar and Euro Exchange Rate: The Pound found support in the region of 1.5650 against the U.S Dollar

Foreign Exchange Rates Currency News - The Pound found support in the region of 1.5650 against the U.S DollarThe Pound is still reeling from Wednesday’s preliminary GDP figures for the fourth quarter.

by Adam Solomon

Sterling / Euro and US Dollar exchange rates

The Pound found support in the region of 1.5650 against the U.S Dollar and briefly pushed to a fresh two-week high at 1.5720, before selling off towards the close of trading last night. The UK currency slipped towards 1.1860 versus the Euro but recovered back towards 1.1950, as rumours spread of Greek debt restructuring deal.

A report from the Confederation of British Industry showed that a gauge of retail sales was significantly weaker-than-expected with a decline to a three-year low of -22. The data reinforced a real lack of confidence in the spending outlook even though official sales data has held generally firmer, which suggests that High Street sales may be under pressure.

The Pound will also be under pressure amid expectations that the Bank of England will engage in further quantitative easing, potentially as soon as February. There will also be uncertainty over defensive flows from the Euro-zone, especially if confidence in the Portuguese outlook continues to deteriorate.

The Pound is still reeling from Wednesday’s preliminary GDP figures for the fourth quarter. The headline figure was marginally weaker-than-expected with a 0.2% contraction and there will be concerns over the lack of growth in the private sector. The data has also reinforced near-term concerns surrounding the economy and the underlying debt levels.

The Bank of England’s MPC minutes from January’s meeting recorded a 9-0 vote for keeping rates and quantitative easing on hold. The minutes did, however, reveal a greater divergence in opinion surrounding the outlook for growth and inflation. There was still a lack of confidence in the economic outlook, but several members were doubtful whether there would be a sustained decline in inflation, making it difficult to secure widespread support for an extension to the bond purchasing plan.

Euro / US Dollar exchange rates

The U.S Dollar weakened against all of the 16 most actively traded currencies, as the Federal Reserve’s pledge to keep interest rates at a record low for longer than expected, which helped spur investor demand for higher-yielding currencies. The Dollar touched the lowest level in five weeks versus the Euro, after policy makers said the benchmark lending rate would stay low until at least late 2014.

There was still a high degree of uncertainty surrounding the Greek debt situation and there was also concerns about Portugal, as yields continued to rise to record levels with 10-year yields close to the 15% level. There were further rumours of pressure on the ECB to take losses on its holdings of Greek bonds, which unsettled the Euro.

Today’s Exchange Rate Data

U.K 00:01 – Gfk Consumer Confidence (January)

EU 09:00 – M3 (December) – 3 Month Moving Average

U.S 13:30 – Advance GDP (Q4)

U.S 14:55 – Final Michigan Sentiment (January)

Related posts:

  1. Pound Sterling / Euro Exchange Rate: The Euro exchange rate found a degree of support in the region of 1.2720 against the U.S Dollar
  2. The Pound rallied through 1.56 against the U.S Dollar while the Euro found strong support in the region of 1.35
  3. Sterling Euro US Dollar Foreign Currency Forecast – The Pound encountered strong resistance in the region of 1.6170 against the U.S Dollar
  4. Pound Sterling to Canadian Dollar Foreign Currency Exchange Rate Forecast – Sterling Rebounds from Technical Support
  5. Pound Sterling, the Euro and US Dollar exchange rate news – The Pound rallied strongly against the Euro exchange rate

Article source: http://feedproxy.google.com/~r/ForeignExchangeOutlook/~3/-7tIJjaVoU0/

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