Fed Pledge To Taper US Easing Causes Extensive Currency Movement

Published: 20 Jun at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, China, Germany, Japan, South Africa,

Pound Sterling
GBP/USD – Trading Lower, 1.5420
Although the Pound fell to a two-week low against the US Dollar following the Federal Reserve’s policy announcement, the British currency fluctuated slightly this morning as UK retail sales data greatly exceeded economist’s expectations. This afternoon’s US news could cause further movement for the GBP/USD paring.

US Dollar
USD/GBP – Trading Higher, 0.6468
After Fed Chairman Ben Bernanke made his highly anticipated policy announcement, and pledged that QE would be brought to a complete end by the close of 2014, the US Dollar broadly strengthened, climbing against the majority of its most traded peers and notably pushing back above 98 Yen per Dollar.

Euro
EUR/USD – Little Changed, 1.3206
The Euro was little changed against its US counterpart as the European session progressed despite Eurozone manufacturing/services PMI beating economists’ forecasts. Gains were limited as German manufacturing PMI disappointed and investors looked ahead to this afternoons meeting of Eurozone finance ministers.

Australian Dollar
AUD/USD – Trading Lower, 0.9216
The Fed’s decision to reduce QE as the US economy improves, coupled with disappointing manufacturing data for China, resulted in the Australian Dollar falling to a 3-year low against its US counterpart and a four-year low against its neighbour, the ‘Kiwi’ Dollar, during the local session.

New Zealand Dollar
NZD/USD – Trading Lower, 0.7850
After New Zealand’s economy was shown to have expanded by less than expected and Chinese manufacturing PMI failed to hit estimates the ‘Kiwi’ posted widespread declines. The South Pacific currency was able to advance on bearish Australian Dollar however.

Canadian Dollar
CAD/USD – ‘Loonie’ Weaker, 0.9698
Although Stephen Poloz first address as Governor of the Bank of Canada allowed the ‘Loonie’ to strengthen, the commodity-driven currency soon weakened once more, falling against a broadly stronger US Dollar. While this afternoon’s US data will be of interest, investors will also be looking ahead to tomorrow’s domestic news.

Japanese Yen
USD/JPY – Yen Weaker, 98.1600
The Yen shed recent gains during the local session as investors flocked to the US Dollar in the aftermath of the Federal Reserve’s pledge to reduce QE in the months ahead. Today’s US data, including employment and housing figures, could inspire further Yen/US Dollar movement.

South African Rand
ZAR/USD – Rand Weaker, 10.2225
The Rand weakened considerably against the US Dollar in response to the Fed’s announcement. With local data thin on the ground for the rest of the week additional Rand movement is most likely to result from further US news.
As of Thursday, 20th June 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1723, GBP USD exchange rate was 1.5516, GBP AUD exchange rate was 1.686, GBP NZD exchange rate was 1.9977, GBP CAD exchange rate was 1.6098, GBP CNY exchange rate was 9.5083, GBP JPY exchange rate was 150.7226, and GBP ZAR exchange rate was 15.8726.

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