Exchange Rates Today: Pound to Euro Hits 8 1/2 Month High, GBP ZAR Also Gains, GBP AUD Falls

Modified: Tuesday, 1 October 2013 17:02 BST - Written by James Fuller

STORY LINK Exchange Rates Today: Pound to Euro Hits 8 1/2 Month High, GBP ZAR Also Gains, GBP AUD Falls

Pound Sterling to euro exchange rate has climbed to a new 8 ½ month high on the session, but GBP AUD has headed the other way. However, hints from the RBA that it wants a weaker Aussie could send GBP AUD higher.

The Pound to Euro exchange rate (GBP/EUR) is currently trading up by 0.12% at 1.1984 GBP/EUR. The Euro to Pound exchange rate is currently trading at 0.8344 EUR/GBP.

Last night’s decision by the Reserve Bank of Australia to maintain its Official Cash Rate at 2.50% surprised few analysts, but it was the RBA’s accompanying statement which proved to be market-moving. The antipodean Reserve Bank noted an improvement in ‘household and consumer sentiment recently’ amongst Australian economic participants, causing the Aussie Dollar to be well-supported during the latter part of last night’s Asian session. The move caused the Pound Australian Dollar exchange rate (GBP AUD) to retrace downwards from pre-announcement levels above 1.7400 down to 1.7202 earlier.

However, the RBA’s commentary did raise one point of concern for investors holding Australian Dollar denominated assets, noting that, “a lower level of the currency than seen at present would assist in rebalancing growth in the economy.” When a central bank openly wishes for its currency to weaken, very often it will get its own way – an unofficial law of the markets which could send the GBP AUD exchange rate higher in the medium term.

Meanwhile, the Pound euro exchange rate (GBP/EUR) has climbed to its highest level since the middle part of January today, touching 1.1998 earlier. With the highs getting higher for the pair and the lows also getting higher, GBP EUR is displaying all of the features of a classic uptrend. However, with strong resistance sure to come at 1.2000, a near-term retracement cannot be ruled out.

Elsewhere, the Pound South African Rand exchange rate (GBP/ZAR) has registered gains on the day thanks to a generalised ‘risk off’ trading environment. The shift out of risk from institutional investors has been driven by a failure from Democrat and Republican investors to strike a debt deal before last night’s deadline.

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TAGS: Australian Dollar Forecasts Currency Predictions Euro Forecasts Eur Forecasts