During the early hours of the European session the Pound was within touching distance of a three-week high against its US counterpart.
The British asset experienced limited movement yesterday in comparatively quiet trading but was able to rally against the US Dollar after the North American currency softened in response to Fed tapering comments and largely retained gains overnight.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.6150 as of 10:50 GMT
Sterling was little changed against the Euro having declined against the common currency yesterday as a result of a better-than-expected economic sentiment report for Germany.
After the minutes of the most recent Bank of England policy meeting were published Sterling briefly trimmed gains against the ‘Buck’. The Pound also fluctuated against several of its most traded counterparts while advancing on the Euro and Australian Dollar.
Although the minutes showed that the nine-member Monetary Policy Committee was in agreement regarding leaving interest rates and the level of bond buying unchanged, they also revealed that the policy officials believe that interest rates may need to be held at record lows even after the 7 per cent unemployment rate target is achieved.
1 US Dollar is currently worth 0.6191 pence
The minutes stated; ‘Once unemployment had reached 7 per cent, the committee would reassess what it had learned about the nature of the recovery. In the meantime, the committee would continue to judge the appropriate stance for policy each month in line with the guidance given in August.’
While stating that productivity was likely to increase, the MPC intimated that a more bullish Pound will put downward pressure on price growth in 2014, though did acknowledge that ‘it was unclear how much of this would be passed through to consumer prices given the more favourable domestic demand environment.’
The Pound’s gains on the Euro were a little limited as the common currency garnered support from the expectation that tomorrow’s measures of Eurozone output and consumer confidence will show improvement.
Additional GBP/USD movement is likely to occur in response to today’s US advance retail sales report. If sales in the world’s largest economy defy expectations for an increase of 0.1 per cent significant volatility could be ahead.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6150 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1946 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7181 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9382 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6191 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8375 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5829 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5171 <
(As of 10:50 GMT)
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