Pound Euro Exchange Rate (GBP EUR) Edges Higher, GBP AUD & GBP NZD Rates Spike

Modified: Thursday, 22 August 2013 10:13 BST - Written by Tim Boyer

STORY LINK Pound Euro Exchange Rate (GBP EUR) Edges Higher, GBP AUD & GBP NZD Rates Spike

The Pound New Zealand Dollar (GBP/NZD) and Pound Australian Dollar (GBP/AUD) exchange rates spiked higher yesterday on Fed QE speculation. Meanwhile, Sterling euro (GBP/EUR) continued its steady move northwards.

The Pound euro exchange rate is currently trading up 0.40% at 1.1725 GBP/EUR. The euro Pound exchange rate is currently trading at 0.8529 EUR/GBP.

Yesterday afternoon’s US Existing Home Sales data showed that the number of sales of pre-owned homes in the world’s largest economy rose to close to its highest level for six years last month. The stellar data set provides further evidence that economic conditions are returning to normal in the nation which gave the world the global ‘credit crisis’ of 2007 following a meltdown in the US subprime mortgage sector which caused a major contraction in the worldwide flow of funding from retail banks to individuals and SMEs.

The ultimate upshot of the crisis saw the US Federal Reserve introduce a Quantitative Easing programme of unprecedented scale. For over a year now, America’s central bank has pumped some $85bn per month into the money markets by buying-up mortgage-backed assets. With recent US data releases generally suggesting that the US economy is healing, market rumours have reached fever pitch regarding a possible reduction to the Fed’s QE programme, possibly as soon as next month.

Yesterday’s US existing homes figures, in common with all recent positive US data sets, have caused investors to price-in a higher percentage chance that the Fed will be trimming QE next month. The outcome of this higher perceived chance that QE is coming to an end has seen the Pound Australian Dollar (currency : GBP AUD) and the Pound New Zealand Dollar (currency : GBP NZD) exchange rates spike higher over the past 48hrs.

Elsewhere, the Pound euro exchange rate (currency : GBP EUR) has edged northwards over the past two weeks, touching 1.1735 just before the end of yesterday’s European equities session. The single currency could come under further selling pressure today if a raft of PMI surveys from across the eurozone fail to live up to expectations.

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TAGS: Australian Dollar Forecasts Euro Forecasts Euro Pound Forecasts New Zealand D Forecasts