Best Pound Dollar Exchange Rate for 5 1/2 Years Today as US Dollar Suffers; Australian Dollar (AUD) Forecast Up

May 6, 2014 - Written by Ben Hughes

STORY LINK Best Pound Dollar Exchange Rate for 5 1/2 Years Today as US Dollar Suffers; Australian Dollar (AUD) Forecast Up

If you ignore a short-term spike which took place at the start of August 2009, the Pound Dollar exchange rate (GBP/USD) struck its highest level for over 5 ½ years during early trading today. Economists remain unconvinced about the veracity of last Friday’s highly positive US labour market figures and the Buck has suffered as a consequence. A move above its existing range-topping rate of 1.7042 will be required from the pair in order to confirm its strong current uptrend. It appears unlikely that the shift Northwards is at an end just yet for GBP/USD.

The Pound Sterling to US Dollar exchange rate is trading up +0.69% at 1.69835 GBP/USD. The Pound Sterling to Australian Dollar exchange rate is trading down -0.02% at 1.81672 GBP/AUD.

The Australian Dollar (currency:AUD) initially climbed against Pound Sterling (currency:GBP) today following the overnight Reserve Bank of Australia policy announcement, sending the Pound Aussie exchange rate down to an intraday low of 1.8133 GBP/AUD.

However, the pair’s losses were rapidly reversed triggering a move up to 1.8223 GBP/AUD a short time ago as analysts digested Governor Glenn Stevens’ accompanying commentary which was of a decidedly dovish tone, raising question marks about conditions in his nation’s labour market. Steven’s assertion that, ‘the demand for labour has remained weak and, as a result, the rate of unemployment has continued to edge higher,’ could serve to anchor the GBP AUD exchange rate moving forward, sending the pair back up towards last week’s near-term high of 1.8298. A break above this significant level could send the Pound up towards its key resistance of 1.8827 against the Aussie – a level which many analysts are forecasting is possible.

Meanwhile, the Pound has enjoyed a relatively strong start to the day overall thanks to a better than anticipated Markit/CIPS Services PMI survey which found that Britain’s all-important combined tertiary sector expanded by an increased rate last month. Given that the vast majority of UK economic activity takes place in the services sector this could cause the Pound to move forward against the other major global currencies during the remainder of the week.

Last updated 07/05/2014 09:00.

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