Exchange Rates Predictions: Pound to Australian Dollar (GBP/AUD) & New Zealand Dollar (GBP/NZD) Forecast To Fall

Modified: Tuesday, 11 February 2014 17:02 BST - Written by Minesh Chaudhari

STORY LINK Exchange Rates Predictions: Pound to Australian Dollar (GBP/AUD) & New Zealand Dollar (GBP/NZD) Forecast To Fall

The main event in the global currency markets this afternoon came in the form of new Federal Reserve Chairperson Janet Yellen’s appearance in front of the US House of Representatives committee. In what was her first public commentary since taking over the top job at the US central bank, Yellen pulled no punches, casting doubt on the veracity of recent American labour market figures and giving strong indications on the future direction of the Fed’s monetary policy.

Yellen pointedly noted that voluntary part-time employment is running at exceptionally high levels in the States, an observation which casts doubt on the true strength of recent US labour market numbers which have suggested that the overall level of domestic joblessness had fallen back to 7.1% last month.

The Fed Chairperson also recorded her surprise at the extremely weak US job creation numbers in both December and January. She went on to confirm that the Fed will be considering a raft of economic data before making its next policy decision and confirmed that any notable change in economic condition could precipitate a pause in the Fed’s controversial Quantitative Easing programme. However, Yellen balanced this with point of view with an assertion that the Fed will take ‘further measured steps’ to cut back on its extraordinary stimulus measures should the apparent improvement in the American economy during recent months continue.

Institutional investors concentrated on Yellen’s failure to commit to an automatic continuation of the Fed’s QE taper and shifted out of US Dollar-denominated assets as a consequence. The resultant move higher for the Pound US Dollar exchange rate saw the pair trade up to close to the 1.6500 GBP/USD threshold. Meanwhile, the risk-sensitive Australian Dollar (currency:AUD) and New Zealand Dollars (currency:NZD) picked up support at the mere prospect that QE might be here to stay for longer than was previously expected. The downward move for Pound to Australian Dollar exchange rate (GBP AUD) and Pound to New Zealand Dollar exchange rate (GBP NZD) is forecast to continue if the Fed’s FOMC do not cut QE by $10bn later this month.

Important Australian & New Zealand Dollar Exchange Rates (Publish: 17:00 GMT 11/02/2014)

The Pound Sterling to Australian Dollar exchange rate is trading down -0.72% at 1.82070 GBP/AUD.
The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.48% at 1.97458 GBP/NZD.
The Euro to Australian Dollar exchange rate is trading down -1.04% at 1.50963 EUR/AUD.
The Euro to New Zealand Dollar exchange rate is trading down -0.8% at 1.63722 EUR/NZD.
The US Dollar to Australian Dollar exchange rate is trading down -1.09% at 1.10573 USD/AUD.
The US Dollar to New Zealand Dollar exchange rate is trading down -0.85% at 1.19918 USD/NZD.

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