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The Pound Euro exchange rate (GBP EUR) is 1.1445. The Pound Dollar exchange rate (GBP USD) is 1.6412. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5917.
In a major development, which came on Friday night, Standard and Poors, the leading ratings agency, downgraded the US?s credit rating from the maximum AAA status to AA+ for the first time in it?s history.
In an accompanying commentary, S&P explained that it had chosen to take this action because the US?s debt consolidation package, which was passed into law last Tuesday following protracted arguments between Democrat and Republican law-makers, had not gone far enough in tackling the burgeoning US debt mountain.
The Federal Reserve quickly responded to the report, stating that S&P had got its figures wrong and had over-estimated the US?s debt commitments by as much as $3tn. Doubt over the veracity of S&P?s calculations has limited the losses which the Dollar has incurred up to this point, with GBP USD and EUR USD trading only marginally higher than last week?s close as Monday?s Asian session ends.
Friday afternoon?s better-than-anticipated US labour market data may also have helped stem losses for the Greenback following S&P?s debt downgrade. The key Non-Farm Payroll figure showed that 117,000 new positions had been created in the non-farming sectors of the world?s predominant economy last month, against expectations that the number would show at 85,000.
Meanwhile, global share markets continued their recent sharp falls during Asian trading overnight, with Hong Kong?s Hang Seng closing down by 4.04% and Tokyo?s benchmark Nikkei 225 index dropping by 2.18% on the session.
The downward shift in global appetite for risk appears to have gained further momentum due to the US?s unprecedented debt downgrade and confirmation from the European Central Bank that it is buying up European bonds in order to prop up debt-addled Eurozone states.
If risk aversion increases, sending European and North American share indices lower later today, then there could be further upside for the GBP AUD, GBP NZD and GBP ZAR pairs, which have taken massive steps forward in the last week. There could also be further downside in the GBP CHF rate, if investors abandon the US Dollar and seek out an alternative safe haven currency.
For other live currency exchange rates and a currency converter see the currency news website.
Source: http://www.currencynews.co.uk/forecast/20110808-666_forex-report-global-sares-trade-lower.html
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