GBP EUR Exchange Rate Drifts Lower, GBP AUD & GBP NZD Rates Also Down

Modified: Tuesday, 28 May 2013 16:44 BST - Written by Frank Davies

STORY LINK GBP EUR Exchange Rate Drifts Lower, GBP AUD & GBP NZD Rates Also Down

The most significant risk event of yesterday’s trading session saw the latest edition of the closely-monitored US Consumer Confidence survey thrash expectations. Analysts had been anticipating a decent improvement on last month’s 69.0 showing, but they did not think that the gauge of sentiment amongst American economic participants would be as high as yesterday’s 76.2 print.

The result triggered pronounced price action in the global currency markets, with the US Dollar, along with the high-yielding Australian and New Zealand Dollars, all moving in the same direction and strengthening against the Pound Sterling. In previous months, a strong piece of US data would have caused the safe-haven Greenback to leak support. However, recent rhetoric from the US Federal Reserve suggesting that its controversial Quantitative Easing programme may be nearing its conclusion has turned around the Buck’s relationship with risk. It seems that now, and for the foreseeable future, the US Dollar is likely to move in tandem with the high-yielding Australian and New Zealand Dollars.

Yesterday’s US Consumer Confidence survey sent the Pound to US Dollar exchange rate (currency : GBP USD) down to 1.5029 – a run at the psychologically key 1.500 level now looks likely for Cable in the near-term. Meanwhile, the GBP AUD and GBP NZD exchange rates pulled back on the day, trading down into the 1.5500s and 1.8500s respectively.

Elsewhere, Sterling put in a generally meek performance on the day, sending the Pound to euro exchange rate down to as low as 1.1672. Investors holding the Pound might have hoped for a better performance, given that the day had brought the release of a severely disappointing set of German import data. The next risk event of note for the Pound comes in the form of tomorrow morning’s UK Nationwide House Price survey. A showing of below the expected annualised figure of 0.9% will be likely to trigger further selling pressure on Sterling.

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