Pound US Dollar Exchange Rate Heads Lower, GBP CAD Forecast To Follow Suit

Modified: Wednesday, 4 September 2013 13:04 BST - Written by Frank Davies

STORY LINK Pound US Dollar Exchange Rate Heads Lower, GBP CAD Forecast To Follow Suit

The GBP USD exchange rate suffered late yesterday thanks to a strong set of US manufacturing figures. Near term directional movement for GBP CAD will be determined by this afternoon’s Bank of Canada policy announcement.

The Pound US Dollar exchange rate (GBP/USD) is currently trading down by 0.01% at 1.5545 GBP/USD. The US Dollar Pound exchange rate is currently trading at 0.6433 USD/GBP.

A strong showing from the latest ISM Manufacturing survey in the US yesterday afternoon ensured that the Sterling US Dollar exchange rate (GBP/USD) ended the session on a duff note. The closely-monitored measure of activity levels in America’s factories showed at a healthy 55.7 – well ahead of the 50 showing which represents break-even for expansion in the sector. Analysts had been anticipating a slight drop-off from last month’s showing of 55.4, given that the figure was taken in the traditionally slow month of August.

The more than respectable manufacturing print saw institutional investors increase their bets that the US Federal Reserve will be trimming its highly controversial Quantitative Easing programme later this month, favouring the Greenback. The Buck will be given fresh direction on Friday when the latest edition of the US Non-Farm Payrolls data is released. A print of above the expected 180,000 showing is likely to send GBP USD lower again.

Looking ahead to today’s session, this afternoon’s Bank of Canada policy decision promises to be a market-moving risk event for the Sterling Canadian Dollar exchange rate (GBP/CAD). Although Canada’s central bank is widely expected to opt for no alteration in its monetary policy, the statement which accompanies the release has the potential to trigger a move for GBP CAD. The pair has been loitering at close to its three year high for a couple of weeks now, making it ripe for a downside retracement at a moment’s notice. If the Bank of Canada surprises the markets by suggesting that its next move may be to tighten monetary policy, then expect GBP CAD to rapidly head lower towards the key psychological level of 1.6000.

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 Canadian Dollar Forecasts Daily Currency U Forecasts