The Euro slid against the US Dollar on Friday but the Pound remains near a 29-month high after Bank of England Governor Mark Carney delivered a speech in which he tries to rule out any rise in the UK’s interest rate.
Mr Carney said that the case for a rise in interest rates would be reviewed next month but tried to dampen expectations for a rise by suggesting that factors other than the unemployment rate would come under revision.
On Wednesday, the jobless rate fell to 7.1%, close to the 7% at which Mr Carney said he would consider a rise. The Bank was not expecting the rate to fall to 7% for another two years.
“If our forecast is going to be wrong it’s better to be wrong in that direction,” he said. “The worst of the crisis is behind us but the financial system is not functioning as well as it could,” he said. “Uncertainty among households and businesses is still preventing investment.”
The US Dollar meanwhile found support from demand for safe haven assets as the world’s emerging market currencies routed due to increased speculation that the Federal Reserve will continue to taper its monetary easing programme.
The rout began after Argentina’s peso declined by 13% yesterday as the country devalued the currency. Turkey’s lira slid to a yet another record low and Russia’s Ruble fell to a five-year low.
“This weakness that we’ve seen in EM currencies appears to be contributing to strength in traditional safe-haven Group of 10 currencies, like the yen and Swiss franc, the price action in recent days tells you that the potential for contagion has not been diminished,” said a strategist at HSBC.
The Pound is likely to regain ground as investors look ahead to next week’s UK GDP growth and consumer confidence data which are both forecast to show improvement.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6063
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7313
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.1081
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6491
The Euro/ US Dollar Exchange Rate is currently in the region of: 1.3674
(Correct as of 15:35 pm GMT)