Pound Sterling to Australian / Canadian / NZ / US Dollar Exchange Rates Spiral On US Debt Woes

Modified: Tuesday, 1 October 2013 09:46 BST - Written by John Cameron

STORY LINK Pound Sterling to Australian / Canadian / NZ / US Dollar Exchange Rates Spiral On US Debt Woes

As US policymakers fail to reach a debt deal the US Dollar slumps. The Canadian Dollar also gives up ground as do AUD and NZD.

The Pound US Dollar exchange rate (GBP/USD) is currently trading up by 0.31% at 1.6190 GBP/USD. The US Dollar Pound exchange rate is currently trading at 0.6177 USD/GBP.

Yesterday’s session in the global currency markets was dominated by the continuing debt standoff between Democrat and Republican lawmakers in the US. The ongoing deadlock in discussions aimed at setting the Federal budget in the States has now caused a partial shutdown of some of the US government’s department, significantly reducing President Barack Obama’s ability to govern.

The US has endured several similar debt rows in recent years largely due to the bipartisan split in the nation’s upper and lower houses, but none of these has ever seen a significant deadline broken. Yesterday was the day when all of this changed and the result brought major shifts in the relative value of many of the most actively-traded global currency pairs.

Leading the way in terms of price action was Cable; not surprisingly the Pound to US Dollar exchange rate (GBP/USD) had jumped to a new multi-month high by the latter stages of yesterday’s North American equities session. The pair shot up to as high as 1.6202 just before the closing bell.

Meanwhile, staying in North America, the Canadian Dollar suffered a similar level of down-selling on the day as investors holding the Loonie fretted about the outcome which the debt row might have on Canada’s number one export market. The Pound Canadian Dollar rate (GBP/CAD) spiralled as a result, climbing to 1.6688 late yesterday.

Elsewhere, the high-yielders gave up ground on the day as appetite for risk and world share markets slumped. The result saw GBP AUD and GBP NZD climb to as high as 1.7410 and 1.9580 respectively. The two antipodean pairs could register further gains if American policymakers fail to raise their nation’s debt ceiling before the middle part of this month.

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