After enjoying a bullish relationship with the Euro for the last few weeks, the GBP/EUR pairing hit a couple of bumps in the road as yesterday’s stronger-than-forecast German economic sentiment data boosted the common currency.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1954 as of 11:00 GMT.
But while Sterling was coming under a little pressure from the Euro, the British currency continued to enjoy dizzy eight-month highs against the US Dollar prior to the release of minutes from the Bank of England’s most recent policy meeting.
Crucially, the minutes showed that all nine members of the Monetary Policy Committee were in agreement regarding holding rates at record lows and sticking to the current level of asset purchases. This united stance was a bit of a turnaround from a month earlier, when some MPC members believed there was a ‘compelling’ argument for making policy more accommodative.
The minutes stated that ‘no member judged that further stimulus was appropriate at present [as] Domestically, there were increased signs that the recovery was taking hold’, and the Pound consequently advanced on all of its most traded peers, notably recouping losses against the Euro.
1 Euro is currently worth 0.8364 pence
As highlighted by analyst Christin Tuxen; ‘There has been the knee-jerk reaction you would expect as there is now less of a threat that stimulus would be increased. People have been caught by surprise by the strong data in the UK. Unless the Fed does something very significant, there may be limited market reaction.’
The FOMC is due to deliver its highly anticipated announcement regarding the tapering of quantitative easing at 19:00 GMT. The Pound could consolidate and extend gains against the US Dollar if the Fed tapers by less than the 15 billion Dollars expected, or else delivers a dovish accompanying statement.
Pound fluctuations can be expected to follow the release of UK retail sales figures tomorrow. Economists are forecasting that sales climbed by 3.2 per cent in August, year-on-year, following month-on-month stagnation. If the report surprises to the upside the Pound could receive a further boost.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5966 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1954 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7069 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9410 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6263 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8364 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5864 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5173 <
(As of 11:00 GMT)
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