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The pound rose to a 5 year high against the dollar
Published: 1 May at 11 AM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, New Zealand Dollar Exchange Rate, Forex, Euro Crisis, UK, Economy, Inflation,
The pound traded at a 5 year high against the US dollar yesterday after another poor set of US economic data put the dollar under pressure.
The US Commerce Department reported that US gross domestic product expanded at just 0.1% during the first quarter of 2014. Analysts had expected the US economy to have slowed down but still expected a rise in the region of 1.1% following an expansion of 2.6% in the last quarter of 2013 and 1.9% over 2013 as a whole.
Analysts now expect the US economy GDP to grow by 3.6% in the second quarter and by 2.8% over 2014 as a whole.
Later, the Federal Open Market Committee (FOMC) opted to reduce still further its monthly asset purchases, citing the continuing improvement seen in employment and ignoring the earlier GDP data. On this occasion, the monthly asset purchase target was reduced by a further $10 billion a month to $45 billion a month stating that “The Committee sees the risks to the outlook for the economy and the labour market as nearly balanced.”
The Fed were quick to add that it is carefully monitoring to make sure that consumer price inflation is headed back towards its 2% mandate in the medium-term.
The Fed also added that the “fed funds” rate is likely to stay where it is “for a considerable time” after the current phase of quantitative easing has ended and even once its targets are close to being met economic conditions, in broader terms, may warrant maintaining its key policy rate “below levels the Committee views as normal in the longer run.” In a nutshell, any increase in the main policy rates will be gradual.
Otherwise, it was a quiet news day and the pound generally drifted northwards against the euro and the New Zealand dollar in a quietish end to the trading month.
The US Commerce Department reported that US gross domestic product expanded at just 0.1% during the first quarter of 2014. Analysts had expected the US economy to have slowed down but still expected a rise in the region of 1.1% following an expansion of 2.6% in the last quarter of 2013 and 1.9% over 2013 as a whole.
Analysts now expect the US economy GDP to grow by 3.6% in the second quarter and by 2.8% over 2014 as a whole.
Later, the Federal Open Market Committee (FOMC) opted to reduce still further its monthly asset purchases, citing the continuing improvement seen in employment and ignoring the earlier GDP data. On this occasion, the monthly asset purchase target was reduced by a further $10 billion a month to $45 billion a month stating that “The Committee sees the risks to the outlook for the economy and the labour market as nearly balanced.”
The Fed were quick to add that it is carefully monitoring to make sure that consumer price inflation is headed back towards its 2% mandate in the medium-term.
The Fed also added that the “fed funds” rate is likely to stay where it is “for a considerable time” after the current phase of quantitative easing has ended and even once its targets are close to being met economic conditions, in broader terms, may warrant maintaining its key policy rate “below levels the Committee views as normal in the longer run.” In a nutshell, any increase in the main policy rates will be gradual.
Otherwise, it was a quiet news day and the pound generally drifted northwards against the euro and the New Zealand dollar in a quietish end to the trading month.
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Source: moneytransfer.co.uk