Pound to Australian Dollar & New Zealand Dollar Exchange Rates Dip; Pound Dollar Forecast Gains Predicted

Modified: Tuesday, 25 February 2014 10:24 BST - Written by John Cameron

STORY LINK Pound to Australian Dollar & New Zealand Dollar Exchange Rates Dip; Pound Dollar Forecast Gains Predicted

Some of the most significant price movement in the global markets during yesterday’s session came in the world’s equities markets. The S&P 500 index in the States had climbed by over 1.0% by the middle part of the American session, taking this broad-ranging gauge of US shares to its highest ever level.

Pound Sterling Loses out to Australian Dollar & New Zealand Dollar

Buoyant investor sentiment helped the high-yielding currencies post decent gains against the Pound Sterling; the Pound Australian Dollar exchange rate dipped to 1.8394 GBP/AUD on the day, while Pound New Zealand Dollar exchange rate settled back in the 1.9900s GBP/NZD, having begun the session above the 2.0100 GBP/NZD threshold.

However, the move out of safe haven assets and into equities on the day appeared to be partly counter-intuitive, given that the US Federal Reserve began tapering its controversial Quantitative Easing programme, which many analysts credit with having fuelled the strong rise in share prices during recent years, just before Christmas last.

An additional factor which would ordinarily tend to cause a drag on risk appetite has been the soft tone of recent data releases out of China. Last week’s numbers which hinted that the slowdown in China’s manufacturing sector is picking up pace seem to have been swept under the carpet by equities traders who have instead chosen to concentrate on the slim chance that, following comments from new Fed Chairperson Janet Yellen earlier this month, the US central bank may opt to push the ‘pause’ button on its asset purchase programme at some stage soon.

Pound to Dollar Exchange Rate Forecast to Move Towards 1.7 GBP/USD

The forward move in shares also appears to be partly dependent on the terrible weather of recent months in the States which has caused a pronounced dip in the strength of US GDP and retail sales figures in particular. If this pattern is repeated later today when this month’s US Consumer Confidence survey is published, then market whispers regarding a Fed taper pause may increase in volume. In such an instance, the US Dollar (currency:USD) is likely to give up further ground against Sterling, propelling the Pound Dollar exchange rate up towards the 1.7000 GBP/USD threshold once more.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Daily Currency Forecasts