Fed Tapering U-Turn Causes Major Movement - USD/GBP USD/EUR Decline

Published: 19 Sep at 10 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Japan, South Africa,

Pound Sterling
Ahead of the publication of UK retail sales data the Pound was trading in the region of an eight-month high against the US Dollar after the GBP/USD pairing jumped by the most for three-years in the wake of the FOMC announcement. With retail sale growth slowing in August by more than expected the Pound could pair gains in the hours ahead.
GBP/EUR – Trading in the Region of 1.1908

US Dollar
USD/EUR – Trading in the Region of 0.7390
Despite the expectations of economists, the Federal Open Market Committee refrained from tapering stimulus. The surprising decision saw the US Dollar drop to multi-month lows against several of its most traded peers. If today’s initial jobless claims data also disappoints the ‘Greenback’ could soften further.

Euro
EUR/USD – Trading in the Region of 1.3530
As the European session opened the Euro was trading in the region of a seven-month high against the US Dollar. The Euro also recorded a slight gain on the Pound prior to the release of UK retail sales figures. An absence of Eurozone data could restrict the common currency’s movement as trade progresses.

Australian Dollar
AUD/USD – Trading in the Region of 0.9519
While the ‘Aussie’ did advance with its higher-risk counterparts following the Federal Reserve’s decision to continue with bond buying at a rate of 85 billion Dollars, gains were limited as the odds of the Reserve Bank of Australia issuing a rate cut before the end of the year increased.

New Zealand Dollar
NZD/USD – Trading in the Region of 0.8400
Despite New Zealand’s Finance Minister stressing the benefits of a weaker ‘Kiwi’ earlier this week, the South Pacific asset surged overnight. Positive domestic growth data and the Fed’s surprising decision regarding stimulus helped the New Zealand Dollar achieve a four-month high against the ‘Greenback’.

Canadian Dollar
CAD/USD – Trading in the Region of 0.9797
During the North American session the Canadian Dollar brushed a three-month high against a struggling ‘Greenback’ and strengthened against peers like the Pound. While further US developments are likely to be the main cause of ‘Loonie’ movement today, investors will also be looking ahead to tomorrow’s domestic inflation figures.

Japanese Yen
USD/JPY – Trading in the Region of 98.7400
With investors abandoning safe-haven assets in the wake of the Federal Reserve’s shocking decision regarding asset purchases the Yen posted broad-based declines. However, the Asian asset was able to gain on a bearish US Dollar.

South African Rand
USD/ZAR – Trading in the Region of 9.6148
Overnight the Rand strengthened by more than 20 cents as the Fed decision gave emerging-market assets a boost. After the Reserve Bank of Africa’s rate decision the Rand experienced modest additional movement.
As of Thursday, 19th September 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1848, GBP USD exchange rate was 1.603, GBP AUD exchange rate was 1.6985, GBP NZD exchange rate was 1.9123, GBP CAD exchange rate was 1.6462, GBP JPY exchange rate was 159.3998, and GBP ZAR exchange rate was 15.5712.

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