US Dollar Rally Against Euro and Pound is Back on Track

Today's exchange rate news, views and predictions for the British Pound, Euro, US and Canadian Dollars.

The US dollar is back on form, all other currencies step aside.

A strong US payrolls report triggered USD gains across the board with EUR/USD testing the 1.25 barrier at the close of the previous week delivering the USD its 12th week of gains - the longest since the dollar was floated from the gold standard in the 1970's.

However, the all-powerful dollar then found itself on the back-foot as the market runs out of USD buyers. Indeed, one analyst reckons the euro is due a bounce as we report here. However, at mid-week it seems the USD is back in control.

A look at the markets shows the following spot rates:

The euro to US dollar exchange rate is today 0.03 pct higher, the EUR to USD conversion is at 1.2674.
The pound to dollar exchange rate is today 0.20 pct lower, the GBP to USD conversion is at 1.6064.
The pound to euro exchange rate is today 0.25 pct lower, the GBP to EUR conversion is at 1.2674.
The US to Canadian dollar exchange rate is 0.08 pct higher, the USD to CAD conversion is 1.1184.

(Please note that these are wholesale rates, your bank will affix a spread at discretion. However, an independent FX provider will guarantee to undercut your bank's offer, thereby delivering up to 5% more FX in some cases, find out more). 

Euro Pound Exchange Rate Today

According to Piet Lammens at KBC Markets the pound will likely struggle to push the euro much lower:

"Later this week, the calendar in the UK is moderately interesting. We keep an eye at the UK production data (Tuesday - came in bang-on expectation and failed to have an impact), the BoE policy decision and the trade balance data on Friday. Sterling has been in really good shape of in 2014 but we don’t see a trigger for a new sterling up-leg anytime soon.

"Of late we indicated that it might be difficult for EUR/GBP to break the key 0.7755 support. Further down the road, the focus for sterling trading should return to the economic fundamentals and to the guidance from the BoE on policy normalization.

"After the recent rebound of sterling and the soft comments from the BoE minutes, investors are pondering the chances for further sterling gains."

Euro Dollar Exchange Rate

"We expect USD to hold on to its gains made from last week. Wednesday sees the release of Fed FOMC minutes out of the US, and with expectations of an early rate hike likely to be announced, we could see USD strengthen further," says Kamil Amin at CaxtonFX.

Longer term, we hear from Morgan Stanley that the euro is entering a new negative dynamic:

"We believe that the EUR regime has changed. From the second half of 2012 to the beginning of this year, no news was good news for EUR as financial inflows and central bank reserve diversification underpinned the currency.

"However, going forward, we believe that no news will be bad news for EUR and that EUR rallies will be limited unless accompanied by significant domestic upside surprise in Europe."

Pound Dollar Exchange Rate Today and Outlook

A powerful note on the outlook for the GBP/USD from Camilla Sutton at Scotiabank has been released today:

"GBP is off its lows but barely, being one of the few currencies to reach a new low early in today’s session before stabilizing. The violence of Friday’s collapse, the breaking of the Sco