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Pound to Aus & NZ Dollar Predictions UPDATED - FED Decision, AUD & NZD Strengthen

October 29, 2014 - Written by John Cameron

The Pound Sterling (currency:GBP) lost ground vs the Australian Dollar (AUD), and New Zealand Dollar (NZD) exchange rates after it endured another body blow late earlier in the week



gbp aud and nzd dollar forecastThe Deputy Governor of the Bank of England cast doubt on the conventional wisdom amongst investors that UK interest rates will be heading higher sooner rather than later.

Jon Cunliffe, speaking at a conference in Cambridge, stated that he wanted to see a more tangible improvement in the domestic jobs market before the UK economy was ready to tolerate an increase in interest rates.

The Pound to Australian Dollar exchange rate today is converting -0.45 per cent lower at 1.81309 GBP/AUD.
The Pound to New Zealand Dollar exchange rate converts -0.2 per cent lower at 1 GBP is 2.03040 NZD.

Cunliffe explained that, ‘there are grounds to continue to suspect that labour supply may be behaving differently to the past, to be cautious about moving to tighten monetary policy on the basis of falling unemployment alone and to wait for clearer signs of strength in pay growth.’

Pound to Euro Exchange Rate Drops



The comments had an immediate effect on the relative level of the Sterling in the global currency markets; the Pound Euro exchange rate had briefly breached the 1.2700 threshold during early trading, but by the latter stages of the US equities session, the pair was trading back down in the 1.2650s once more.

Meanwhile, price action for the GBP USD had followed the same pattern on the day and the Pound was trading back down in the low 1.6100s against the Buck late on.
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Fed Decision Could Affect GBP vs AUD NZD

Looking ahead, today is Federal Reserve policy decision day. Expect any alteration to the wording of the statement which accompanies the announcement to have a marked effect on the relative value of the Greenback, with a dropping of the words ‘considerable time’ from its forward guidance on interest rates triggering renewed support for the US tender.

Fed Chair Janet Yellen’s press conference which follows could also shape the fortunes of several leading global tenders into the medium term.

Journalists grilling Yellen will be looking for any suggestion that, following global share markets’ QE3-withdrawal induced plunge of earlier this month, another bout of asset purchase remains a possibility.

If Yellen does hint at QE4, then expect the Pound to Australian Dollar and New Zealand Dollar exchange rates to move sharply lower.
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