Dollar Pound Exchange Rate (USD/GBP) Tumbles to 2 Year Low as Dollar Slides vs Major Currencies

Modified: Friday, 27 December 2013 20:31 BST - Written by Toni Johnson

STORY LINK Dollar Pound Exchange Rate (USD/GBP) Tumbles to 2 Year Low as Dollar Slides vs Major Currencies

The US Dollar to Pound exchange rate has tumbled to a two-year low after economists said that the ‘Greenbacks’ recent sharp gains were overdone and as speculation remains high that the Federal Reserve will not raise interest rates for a long time despite it tapering its $85 billion per month quantitative easing programme.

The speculation caused the US Dollar to slide against the majority of its most traded peers including the Pound Sterling, with the Dollar Pound exchange rate tumbling beyond a two-year low. Against the Japanese Yen the currency retreated from a five-year high.

“The Dollar is generally weaker, the general feeling going into the New Year seems to be along the lines that the Fed may have begun the tapering but it is taking it very easy. By adjusting the language surrounding the unemployment rate threshold lower and due to very low inflation levels, an interest rate move seems so far off as not even worth consideration,” said the head of foreign exchange strategy at Saxo Bank.

Also weighing upon the currency is the expectation that next week’s bout of economic data is likely to show that manufacturing in the US declined in December and expectations are growing that next week’s Chicago purchasing managers’ report will
also show a decline. An increase in the demand for riskier assets also knocked the US Dollar. Riskier commodity and emerging market currency’s were all able to post gains with the Australian Dollar rising by 0.30%.

US Dollar Exchange Rates Today (USD) 27/12/2013

The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6054
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7234
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0649
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6517
The Euro/ US Dollar Exchange Rate is currently in the region of: 1.3823

(Correct as of 11:35 am GMT)

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