Pound Australian Dollar Exchange Rate Spirals to 1.8337 GBP/AUD; Sterling NZ Dollar Hits 1.9885 GBP/NZD

Modified: Thursday, 12 December 2013 22:00 BST - Written by John Cameron

STORY LINK Pound Australian Dollar Exchange Rate Spirals to 1.8337 GBP/AUD; Sterling NZ Dollar Hits 1.9885 GBP/NZD

In the currency markets, the Pound Australian Dollar exchange rate (GBP/AUD) spiralled to a range-topping 1.8337 earlier, (some 3c above its intraday low), while the Pound New Zealand Dollar exchange rate (GBP/NZD) climbed to as high as 1.9885 – a run at the two to one threshold now looks likely in the short term for the pair. Meanwhile, GBP USD pared back to 1.6322 on the Retail Sales number; further losses would appear a certainty for the pair if Wednesday yields a QE cut from the Fed.

A key data release in the US has shaped price action across the global currency market during this afternoon’s trading session. A better than anticipated print of 0.7% from today’s US Advance Retail Sales numbers has had a pronounced effect on the relative value of the Commodity Dollars as institutional investors adjust their exposure ahead of next week’s all-important Federal Reserve policy decision.

The market movement which followed the publication of November shop sales numbers from the States suggested that market participants now believe that a cut to the Federal Reserve’s $85bn per month Quantitative Easing is a live possibility for next Wednesday. The encouraging retail sales figures for the month featuring America’s Thanksgiving Holiday have been taken as a signal that US economic participants have placed fears regarding a slowdown in the world’s leading economy, following the partial US government shutdown which marred the first half of October, firmly to the back of their minds. Fed policymakers are consequently likely to feel that it is now safe to cut QE.

The mere thought that next week might be the week that the Fed commences its much-vaunted QE taper caused investors to shift wholesale out of risk, sending global stock markets sharply lower. London’s FTSE 100 closed down by almost 1.00% on the day, while New York’s narrow-based Dow Jones had shed a marginally lower 0.66% during the middle part of the North American session.

Key Australian/ New Zealand Dollar Exchange Rates (22:00 GMT 12/12/2013):

The Pound Sterling / Australian Dollar exchange rate is trading up +1.13% at 1.83058 GBP/AUD.
The Pound Sterling / New Zealand Dollar exchange rate is trading up +0.44% at 1.98785 GBP/NZD.
The Euro to Australian Dollar exchange rate is trading up +1.1% at 1.54045 EUR/AUD.
The Euro to New Zealand Dollar exchange rate is trading up +0.4% at 1.67280 EUR/NZD.
The US Dollar to Australian Dollar exchange rate is trading up +1.35% at 1.12030 USD/AUD.
The US Dollar to New Zealand Dollar exchange rate is trading up +0.66% at 1.21655 USD/NZD.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts