Yesterday’s surprisingly buoyant UK housing data boosted the Pound against its peers, and after retaining gains against the Euro and extending its advance against a bearish US Dollar overnight the British asset began the European session close to a nine-month high against the ‘Greenback’.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1962 as of 10:10 GMT.
Then, with German unemployment rising unexpectedly and German manufacturing PMI coming in just shy of estimates, Sterling strengthened further against the Euro prior to the publication of the UK’s own manufacturing data.
Although a report compiled by Markit and the Chartered Institute of Purchasing and Supply showed that the UK manufacturing sector expanded by less-than-forecast in September, coming in at 56.7 rather than the 57.5 expected, the result remained close to the two and a half year high of 57.1 recorded in August. It also marks the sixth consecutive month of expansion in the sector, and helped polish off the strongest quarter for manufacturing since the first three months of 2011.
In other positive news, the domestic labour market showed signs of positive progression, with the pace of job creation achieving a 28-month high.
1 Euro is currently worth 0.8359 pence
Rob Dobson, a senior economist with Markit, stated; ‘UK manufacturing continues to boom, adding to the flow of upbeat data which suggest that the economy is growing faster than almost anyone expected. […] Job creation is also on the rise, with manufacturers reporting the strongest employment growth since May 2011 as firms took on more staff to meet faster order book growth. These numbers are encouraging in respect to the rebalancing of the economy, with goods production likely to provide a major stimulus to economic growth in the third quarter.’
It wasn’t all good news however, and Dobson did add; ‘The main disappointment came in the form of a slower rise in export orders. With the exchange rate still around 20 per cent weaker than before the financial crisis, we would expect to be seeing far stronger export gains than companies are currently reporting, especially with the Eurozone showing signs of finally pulling out of recession.’
After the UK report was published the Pound continued to trade strongly against both the Euro and US Dollar, although a surprising drop in the Eurozone’s unemployment rate later helped the common currency recoup earlier declines.
If this week’s UK construction and services reports also add to signs of improving UK economic expansion, Sterling could enjoy a primarily bullish five-day run against its major peers.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6226 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1962 –
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7233 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9531 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6158 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8359 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5798 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5124 <
(As of 10:10 GMT)
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