Pound To US Dollar Rate Could Head Lower As Obama Threatens Iran With Action

Modified: Monday, 5 March 2012 07:49 BST - Written by Frank Davies

STORY LINK Pound To US Dollar Rate Could Head Lower As Obama Threatens Iran With Action

The Pound to US Dollar exchange rate is 1.5814.

Friday’s session in the currency markets saw the release of a slew of economic data. The general tone of these figures was positive – German Retail Sales figures for January thrashed expectations, the latest UK PMI Construction sector survey showed a marked pick-up in the rate of growth in this key sector, while Canadian GDP growth numbers for December came out slightly higher than had been anticipated.

In spite of these numbers, which hinted at a strengthening in the global economic recovery, share markets endured a difficult day. London’s FTSE 100 closed down by a third of a percentage point, while the benchmark S&P 500 lost a similar amount of ground.

Risk aversion in the markets was driven by investors’ fears over geo-political events in several corners of the globe. Western concerns over Iran’s ongoing nuclear programme fail to go away. These concerns are likely to escalate moving into this week’s session thanks to last night’s comments from US President Barack that his nation ‘will not hesitate’ to use force in order to cajole the Persian state into giving up its scheme.

Reports last night that the Russian people had elected Vladimir Putin as their President for a third term. Although the news comes as no surprise, market participants may see the development as a positive development – ‘better the devil you know’, as they say.

The draining of appetite for risk, which saw the GBP USD exchange rate make a renewed downward move towards the 1.5800 level on Friday, could extend into this week’s session, given Obama’s comments of yesterday. If this proves to be the case then the high-yielding Australian and New Zealand Dollars could be in for a rough ride during the coming week.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Australian Dollar Forecasts Daily Currency Forecasts