The GBP to USD exchange rate soared to its highest-level in close to four-years on Tuesday after the Pound found support from positive industrial and manufacturing production data and as the International Monetary Fund raised its growth forecast for the UK.
Earlier in the session Sterling advanced against the majority of its most traded peers after data showed that industrial and manufacturing production in the UK increased at the fastest pace in over a year.
The Office for National Statistics data showed that U.K. industrial production increased by 0.9% in February and was up by 2.7% on a year by year basis. Economists had been forecasting a monthly gain of 0.3% and an annual increase of 2.2%.
Manufacturing output jumped by 1.0% month-on-month in February, the biggest rise since September 2013,
The upbeat data increased speculation among investors that the Bank of England could raise interest rates sooner than expected.
In the afternoon Sterling surged to come close to a four-year high against the ‘Greenback’ after the International Monetary Fund raised its growth forecast for the UK economy and said that the nation will have the fastest growing economy out of the G7 economies.
The IMF said that it expects the UK economy to grow by 2.9% in 2014 and by 2.5% in 2015.
The US Dollar meanwhile remains under pressure from last week’s disappointing nonfarm payrolls data. The data has caused investors to speculate that the Federal Reserve could slow the pace of tapering its monetary easing programme.
Attention will now be focused on the release of the minutes of the Federal Reserve’s March policy meeting.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5972,
US Dollar,,Euro,0.7251 ,
US Dollar,,Australian Dollar,1.0711 ,
US Dollar,,Canadian Dollar,1.0934 ,
Pound Sterling,,US Dollar,1.6744 ,
[/table]
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