Pound To Dollar Exchange Rate Continues To Head Higher, NOK and CAD Remain Steady In Spite Of Oil Price Rally

Published: Monday, 17 September 2012 16:00 BST - Written by James Fuller

STORY LINK Pound To Dollar Exchange Rate Continues To Head Higher, NOK and CAD Remain Steady In Spite Of Oil Price Rally

The QE3 equities boost appears to have run out of steam this afternoon. Thursday evening’s announcement by the FOMC saw world shares well-supported as we headed towards the weekend, however the Fed’s stimulus package wasn’t able to mask fears from institutional investors regarding various global situations for long. One potential flashpoint, which has been on the back burner for some time now, has been the trade stand-off between the US and China. US President Barack Obama reignited the row this afternoon when he publicly announced that he would be lodging a complaint against the giant Asian economy’s policymakers for making illicitly paying subsidies to domestic Chinese producers. The situation, if it escalates, has the potential to drain appetite for risk from the market. The mere thought of such an occurrence threatens to stem recent losses for the US Dollar. However, the Greenback remains under pronounced selling pressure on the day. This has taken the GBP USD exchange rate into the mid-16200s on the session.

Elsewhere, wholesale oil prices have headed higher today for the eighth session on the bounce, again thanks in large part to the Federal Reserve FOMC’s decision to extend QE last Thursday. The price of a barrel of Brent Crude is now approaching its highest level since May. Ordinarily, such a development would tend to favour commodity-driven currencies including the Canadian Dollar and Norwegian Krone. However, the GBP CAD exchange rate has remained steady on the day, fluctuating around the 1.5800 level, and the GBP NOK rate has registered a very slight gain on the session and is currently sitting at 9.2403. If crude oil prices continue to head northwards, then it would appear likely that these two pairs may face a bout of selling pressure sooner rather than later.

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