Pound to US dollar exchange rates (known as Cable) fell as the Halifax house price index figures came out lower than expected. We have seen a full cent gain by the dollar since trade opened, dropping below 1.58. Recent figures from the US have been good and although one would expect a stronger currency off the back of positive figures the case has been the opposite. Euro Dollar rates also pushed lower following the weak Euro zone GDP figures earlier today, with the dollar gaining 75 points so far.
The USD is seen as a safe currency so when investors are worried about global economic factors the dollar is bought up making it stronger. As America is the largest global economy, if data is coming out better than expected investor confidence grows, they are less worried and investments become riskier. The result of this is selling off the safe haven dollar and buying riskier currencies like the “commodity” led Canadian, Aussie and NZ dollar and to some extent sterling.
With no data out from the States today we may well see the slide in cable continue but over the rest of the week comes a raft of employment and jobs data so check back for updates on how the rates are affected. If the key non-farm payroll figure on Friday comes in better than expected I predict we will see higher pound to dollar exchange rates. If you have a requirement register your interest at email@example.com and I can keep you posted as data releases unfold.