Foreign Exchange Report : GBP USD Rate Up as Investors Fear Further Loosening of US Monetary Policy Following FOMC Minutes
31 Aug 2011 at 7 AM - Written by John Cameron
The Pound Euro exchange rate (GBP EUR) is 1.1294. The Pound Dollar exchange rate (GBP USD) is 1.6316. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5259.
Last night saw the release of the minutes of the Federal Open Market Committee’s last policy meeting, which took place on 9th August. The Minutes echoed Fed Chairman Ben Bernanke’s speech at last Friday’s economic symposium at Jackson Hole, showing that the Federal Reserve’s policy-makers are actively considering non-conventional means of further weakening monetary policy.
Discussions included the possible introduction of QE3, (the much-vaunted third tranche of US quantitative easing), and changing the rate of return on deposits held with the Fed, raising the possibility of negative interest rates for the world’s largest economy.
The Minutes noted that the US economy remains susceptible to ‘adverse shocks’, raising question marks over its ability to ride out future sovereign debt and retail banking sector scares. Policy-makers also noted that the US’s key housing sector ‘remains depressed’.
The gloomy tone of the minutes coupled with the underlying threat of a further loosening of US monetary policy caused the Greenback to give up ground against the other majors in the latter part of yesterday’s North American session, seeing the GBP USD rate reject the day’s low of 1.6255 just before the release of the FOMC minutes, to touch 1.6318 within three hours of their release.
Elsewhere, last night’s Asian session saw the release of weak manufacturing sector output from two of Asia’s powerhouse economies. Japanese factory output data for July showed a marked slowdown, with production increasing by a monthly 0.6% compared to a 3.8% rise in June. South Korea’s counterpart figure was even worse, pointing to a 0.4% monthly contraction in factory production last month.
Despite these disappointing numbers, Asian share indices avoided any significant losses overnight. If European shares follow their lead later today, then further downside is possible for the GBP AUD, GBP NZD and GBP ZAR rates.
For other live currency exchange rates and a currency converter see the currency news website.
Foreign Exchange Report : GBP USD Rate Up as Investors Fear Further Loosening of US Monetary Policy Following FOMC Minutes
Last night saw the release of the minutes of the Federal Open Market Committee’s last policy meeting, which took place on 9th August. The Minutes echoed Fed Chairman Ben Bernanke’s speech at last Friday’s economic symposium at Jackson Hole, showing that the Federal Reserve’s policy-makers are actively considering non-conventional means of further weakening monetary policy.
Discussions included the possible introduction of QE3, (the much-vaunted third tranche of US quantitative easing), and changing the rate of return on deposits held with the Fed, raising the possibility of negative interest rates for the world’s largest economy.
The Minutes noted that the US economy remains susceptible to ‘adverse shocks’, raising question marks over its ability to ride out future sovereign debt and retail banking sector scares. Policy-makers also noted that the US’s key housing sector ‘remains depressed’.
The gloomy tone of the minutes coupled with the underlying threat of a further loosening of US monetary policy caused the Greenback to give up ground against the other majors in the latter part of yesterday’s North American session, seeing the GBP USD rate reject the day’s low of 1.6255 just before the release of the FOMC minutes, to touch 1.6318 within three hours of their release.
Elsewhere, last night’s Asian session saw the release of weak manufacturing sector output from two of Asia’s powerhouse economies. Japanese factory output data for July showed a marked slowdown, with production increasing by a monthly 0.6% compared to a 3.8% rise in June. South Korea’s counterpart figure was even worse, pointing to a 0.4% monthly contraction in factory production last month.
Despite these disappointing numbers, Asian share indices avoided any significant losses overnight. If European shares follow their lead later today, then further downside is possible for the GBP AUD, GBP NZD and GBP ZAR rates.
For other live currency exchange rates and a currency converter see the currency news website.
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