GBP Softens, USD Movement Expected after Jobs Report, EUR Stronger

Published: 5 Dec at 10 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada,

Pound Sterling
Prior to the publication of the Bank of England’s GfK Inflation report for the next 12 months, the Pound was trending in a slightly softer position against both the Euro and US Dollar. The British asset came under pressure on Thursday after the Bank of England chose to leave interest rates and asset purchases unchanged. Earlier in the year it seemed that the BoE would increase borrowing costs before Christmas, but external pressures and a slowing in domestic growth means that investors are now pricing in a rate hike in the fourth quarter of 2015.

US Dollar
The US Dollar fluctuated modestly on Thursday as investors responded to slightly disappointing initial jobless and continuing claims figures. However, the ‘Greenback’ could advance on almost all of its most traded rivals if today’s US Non-Farm Payrolls report shows another month of strong employment growth.

Euro
The European Central Bank’s decision to refrain from adjusting fiscal policy until the impact of the current measures can be thoroughly assessed lent the Euro support yesterday. The common currency was able to post a notable gain against the Pound and also strengthened against both the US Dollar and Australian Dollar.

Australian Dollar
During the North American session, the Australian Dollar’s bearish run paused briefly and the South Pacific asset advanced on the US Dollar. However, the Australian Dollar shed its modest gain as investors dwelt on the prospect of the Reserve Bank of Australia cutting interest rates next year. A concerning AiG Performance of Construction index also took a toll on the ‘Aussie’. In November the gauge of the construction sector plummeted below the 50 mark separating growth from contraction.

New Zealand Dollar
A lack of pertinent economic news for New Zealand limited movement in the nation’s currency on Friday. That being said, the ‘Kiwi’ did ease lower against the Pound as investors locked in profits after the GBP/NZD exchange rate fell to a three-week low.

Canadian Dollar
Yesterday’s impressive Canadian Ivey PMI failed to give the ‘Loonie’ a leg up during the local session. Although the index rose from 51.2 to 56.9, the softness in oil prices prevented the Canadian Dollar from climbing. Today movement in the commodity-driven currency will be the result of jobs reports from both Canada and the US.
As of Friday, 5th December 2014, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.2682, GBP USD exchange rate was 1.558, GBP AUD exchange rate was 1.874, GBP NZD exchange rate was 2.0205, and GBP CAD exchange rate was 1.7814.

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