Pound Dollar Exchange Rate Steady, Tonight?s FOMC Decision May Trigger A Move

Modified: Wednesday, 12 December 2012 09:04 BST - Written by James Fuller

STORY LINK Pound Dollar Exchange Rate Steady, Tonight?s FOMC Decision May Trigger A Move

News emerged from North Korea last night that the secretive pariah state had carried out a rocket launch which succeeded in placing a satellite in polar orbit over the earth. The international community has quickly moved to condemn North Korea’s actions, with Japan, South Korea and the USA all issuing statements railing against the rogue South East Asian nation’s apparent flouting of an international ban on long range rocket testing.

In spite of North Korea’s incendiary behaviour, Asian share markets have managed to register healthy gains during the overnight session, with Tokyo’s Nikkei 225 trading up by almost three quarters of a percentage point during the latter stages during the latter stages of Japan’s trading day, while Hong Kong’s Hang Seng posted a gain of just above 0.5% during the same time frame.

The positive performance from Asia’s share markets came as the result of the release of firmer than anticipated Japanese data overnight. October’s annualised Machine Orders number thrashed expectations of a -0.5% showing to print at 1.2%, while the Japanese Tertiary Index survey indicated that the state of the services sector in Asia’s second largest economy is not as bad as had been feared. The dual releases provide a chink of light for investors holding Yen-denominated assets following Sunday night’s tame Japanese Q3 GDP data which revealed that the country had unexpectedly plunged back into a technical recession last quarter.

Looking ahead to today, the premier risk event comes just after Europe’s equities close in the form of the latest Federal Reserve Open Market Committee policy announcement. Anything other than a ‘no change’ decision on US interest rates would come as a huge shock, however the tone of Fed Chairman Ben Bernanke’s press conference which follows the announcement will, as ever, be closely monitored. Any hint that the FOMC may be considering extending its QE programme in response to the generally soft nature of recent global data releases which have pointed to a renewed slowdown in the world economy, would be sure to weaken the Greenback, sending the GBP USD exchange rate northwards.

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 Daily Currency Updates Dollar Po Forecasts