Pound Sterling to US Dollar (GBP/USD) Exchange Rate climbs to two-week high as data weighs on the ‘Greenback’

The Pound climbed to a two-week high and the Euro climbed to its highest level of the year so far against the US Dollar after data showed that the US economy expanded at a slower than expected pace in the fourth quarter of 2013 and as other data came in mixed.

Sterling was on course to make a weekly gain against the US currency after Chief economist at the Bank of England Spencer Dale said that policy makers will be probably be split on when to raise interest rates. The currency also found support from a report which showed a further rise in UK house prices and as consumer confidence remained stable.

Data released by the Washington based Commerce Department showed that the US economy expanded at a slower than expected pace in the last quarter of 2013. GDP expanded by a 2.4% annualised rate, down from the 3.2% gain issued last month. Economists had been expecting an increase of 2.5%.

Also weighing upon the currency was the release of pending home sales data. On a yearly basis home sales tumbled by -9%. The figure was above economist expectations for a fall of -11.6%. Month on month sales edged higher by 0.1%.

A recent run of disappointing data releases highlighted just how much of an impact the harsh winter weather has had on the world’s largest economy. Economists still believe that the economy will strengthen later in the year.

“We should see some pent up activity show up in the second quarter of the year,” said an economist at RBC Capital Markets.

Taking some of the edge off of the GDP and home sales data was the February reading for the Chicago PMI. The report showed that the regional index climbed to 59.8, beating economist expectations for a reading of 56.4.