Prior to the release of UK GDP figures the Pound was trading within spitting distance of an eight-month high against its US counterpart. With economists expecting the growth report to confirm expansion of 0.7 per cent in the second quarter Sterling also recorded a modest gain against the Euro.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.6035 as of 10:45 GMT.
Overnight the Pound was supported by a gauge of UK consumer confidence, which showed an increase in sentiment in September as the nation’s economic recovery became more stable.
The index, compiled by the Centre for Economics and Business Research, climbed from 106.7 in August to 108.1.
According to CEBR Chairman Douglas McWilliams; ‘The present recovery is now broader based than the false dawn we saw in 2010. Given this continued momentum, we would expect growth next year to be its strongest since 2007 – before the financial crisis crippled the real economy.’
1 US Dollar is currently worth 0.6236 pence
However, as the European session progressed Sterling shed gains against peers like the US Dollar as the UK economy was shown to have expanded by less than initially estimated, year-on-year.
Although the nation did post the quarterly growth of 0.7 per cent expected, from a year earlier the economy grew 1.3 per cent instead of 1.5 per cent.
In the three months from March, disposable income rose by 1.5 per cent while household expenditure increased 0.3 per cent.
The Office for National Statistics’ data also showed that the UK’s economy expanded by more than previously recorded in the first quarter, with growth of 0.4 per cent rather than 0.3 per cent.
The results prompted this response from analyst Annalisa Piazza; ‘UK GDP is on a strong pace, but not enough to close ample output gap. The solid performance doesn’t seem to convince Monetary Policy Committee members that the country needs a less accommodative policy stance.’
A separate report showed an unexpected drop in business investment of 2.7 per cent. Economists expected a gain of 0.9 per cent.
Government spending also increased by 0.5 per cent in the three-months from March following a decline of 0.2 per cent in the first quarter.
Sterling lost ground against the majority of its rivals after the data was published.
While the GBP/USD pairing is likely to experience further movement as a result of US growth and initial jobless claims figures, the GBP/EUR pairing may be restrained ahead of tomorrow’s influential consumer confidence figures for the Eurozone.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6035 <
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1882 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7079 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9412 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6236 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8417 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5856 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5146 <
(As of 10:45 GMT)
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