Pound Dollar Exchange Rate Forecast To Gain, GBP Also Higher Vs CAD, AUD, NZD

Modified: Thursday, 17 October 2013 21:15 BST - Written by John Cameron

STORY LINK Pound Dollar Exchange Rate Forecast To Gain, GBP Also Higher Vs CAD, AUD, NZD

A move back into risk-laden assets from investors limited gains for the Pound against the Australian and New Zealand Dollars yesterday. However, the GBP USD exchange rate shot forward as investors dumped Dollars in expectation of a continuation of the Fed’s QE programme.

The Pound US Dollar exchange rate (GBP/USD) is currently trading up by 1.35% at 1.6160 GBP/USD. The US Dollar Pound exchange rate is currently trading at 0.6188 USD/GBP.

Global stocks surged on the day yesterday, sending the broad-ranging S&P 500 index in the States up to within a whisker of a new record high above the 1,720 level. The shift into risk was driven by collective relief from institutional investors that US policymakers had averted a messy debt default by increasing their nation’s debt ceiling. With market participants’ focus swinging onto the fact that the US Federal Reserve is now likely to defer the tapering of its controversial asset purchase scheme until Q1/Q2 of 2014. The future now looks bright for the Pound US Dollar exchange rate (GBP/USD) moving forward.
The increase in global appetite for risk over the past 24hrs has had also had a marked effect on other currencies. The Pound had a good day of it yesterday, but its gains against the Australian and New Zealand Dollar exchange rates (GBP/AUD & GBP/NZD) were limited by the renewed burst of confidence from investors. GBP AUD climbed by only 0.32% on the session, rising to 1.6774, whilst GBP NZD edged higher by only 0.40% to rise to 1.8995.

However, the Pound recorded good gains against the Canadian Dollar on the session, sending the GBP CAD exchange rate (GBP/CAD) up by 1.00% by the middle part of the North American equities session. With no tier one data releases in Canada, the forward move for GBP CAD was driven by concerns from market participants over the potential downward multiplier effect which the partial US government shutdown would have on activity levels in the US economy. The potential fallout for the Loonie could send the GBP CAD exchange rate higher during the next few weeks.

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