Euro Exchange Rate Today: GBP EUR Climbs As America Goes To The Polls

Modified: Tuesday, 6 November 2012 09:54 BST - Written by David Woodsmith

STORY LINK Euro Exchange Rate Today: GBP EUR Climbs As America Goes To The Polls

The Reserve Bank of Australia went against analysts’ expectations last night and opted to maintain its key lending rate at its current level of 3.25%. The RBA’s accompanying statement made mention of last month’s higher than anticipated domestic CPI inflation data as the key reason behind their decision, but also went on to observe that global data releases had been of a slightly firmer tone over the past month. Market participants had been pricing-in a high likelihood of a rate cut following recent gloomy assessments of the condition of the world economy by RBA board members.

The news has seen the Australian Dollar make gains against Sterling during the overnight session. The GBP AUD exchange rate currently stands at 1.5330 and there could be more downside to come for the pair as the week progresses.

Elsewhere, this morning’s whole of eurozone Producer Price Index data provides the major risk event of note today. Analysts are anticipating a 2.6% showing for this key leading indicator of inflation. Anything significantly lower than this and the euro could endure further weakness which could potentially send the GBP EUR exchange rate up towards 1.2600 from its current level of 1.2505.

Meanwhile, the US electorate goes to the polls this afternoon UK time to elect their next president. The result is too tight to call at this stage, so the effect of the popular ballot is extremely difficult to predict. However, Republican candidate Mitt Romney’s advisors have consistently questioned the benefit of Quantitative Easing in the States, so a Romney victory could potentially signal a curtailing of the Fed’s current open-ended programme of QE, triggering further support for the US Dollar.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Daily Currency Forecasts