Pound Sterling to Dollar Exchange Rate (GBP/USD) Slides On Manufacturing Figures

Modified: Monday, 4 November 2013 09:30 BST - Written by Toni Johnson

STORY LINK Pound Sterling to Dollar Exchange Rate (GBP/USD) Slides On Manufacturing Figures

The Pound Dollar exchange rate (GBP/USD) took a tumble on Friday afternoon. Meanwhile, the Commodity Dollars continued to put in a patchy performance in the global currency markets.

The major mover during last Friday’s session in the global currency markets was without doubt the US Dollar. It used to be the case, in the days before Quantitative Easing, that a strong US data release would improve risk sentiment among investors, causing the safe haven US tender to weaken. Not anymore. The final session of the week brought the publication of the widely-watched ISM Manufacturing survey in the States. Analysts had been expecting the figure to show that the pace of expansion of activity in America’s manufacturing had slowed last month.

When the figure revealed that the rate of growth of this key area of the world’s leading economy had in fact accelerated during October, global stocks surged and the Greenback pushed on as market participants factored-in a higher percentage chance that the US Federal Reserve will be trimming it controversial asset purchase scheme sooner rather than later. Support for the Buck sent the Pound to US Dollar exchange rate tumbling down into the lower end of the 1.5900s.

Current spot exchange rates: Pound US Dollar exchange rate is currently trading down by 0.80% at 1.5921 GBP/USD. The US Dollar Pound exchange rate is currently trading at 0.6281 USD/GBP.

Elsewhere, the South African Rand (currency:ZAR) continued to leak support during the final stretch of lat week’s session, causing the GBP ZAR exchange rate to settle well above the 16.0000 threshold. The South African tender haemorrhaged support as investors flinched at the though that the crutch which is the Fed’s QE programme may soon be removed. Positive data sets from China and / or the eurozone this week could see the ZAR reverse its recent losing streak against Sterling.

Other key risk events of note this week include tomorrow morning’s Reserve Bank of Australia policy decision (look for any hint of further rate cuts from the RBA to send GBP AUD back into the 1.7000s) and Thursday’s Bank of England announcement.

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