Pound Sterling to US & Canadian Dollar Exchange Rate Head Lower

Modified: Tuesday, 24 September 2013 18:33 BST - Written by David Woodsmith

STORY LINK Pound Sterling to US & Canadian Dollar Exchange Rate Head Lower

The Pound US Dollar exchange rate is forecast to register medium-term gains following weaker than expected American data this afternoon. Meanwhile, strong Canadian shop sales data is having its own effect on GBP CAD.

The Pound US Dollar exchange rate (GBP/USD) is currently trading down by 0.22% at 1.6007 GBP/USD. The US Dollar Pound exchange rate is currently trading at 0.6247 USD/GBP.

Data published in the States this afternoon has pointed to a pronounced drop-off in the level of Consumer Confidence in the US. The September edition of the closely-monitored Consumer Confidence survey showed a pronounced dip in positivity amongst American economic participants from last month’s showing of 81.8 down to 79.7 this month. The development comes in spite of the US Federal Reserve’s announcement last week that it will be ploughing on with its $85bn per month Quantitative Easing programme.

The relatively tame data from the States, which was slightly below analysts’ expectations of a 79.9 showing, will surely lead Fed-watchers to up their bets that QE is here to stay, for the time-being at least. In the medium term, this is likely to cause the US Dollar to weaken, but the Buck has managed to push ahead against the Pound on the day, sending the GBP USD exchange rate down to as low as 1.5951 earlier. The move is a continuation of the retracement which the pair has experienced since the initial sharp move forward which followed last week’s Federal Reserve announcement fizzled out.

Elsewhere in North America, this afternoon’s Canadian Retail Sales data for July beat expectations to print at a monthly 0.6%. This marked a significant turnaround from June’s counterpart figure which showed at -0.6%. The news has ensured that the recent uptrend for the GBP CAD exchange rate has hit the brick, taking the pair briefly back into the 1.6300s earlier. In the medium term, the Canadian Dollar’s fortunes remain firmly tethered to US monetary policy – any hint from Fed policymakers that QE is here to stay will trigger renewed support for the Loonie.

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