The Pound (GBP) exchange rate strengthened against the Euro (GBP/EUR), US Dollar (GBP/USD), Canadian Dollar (GBP/CAD) and Australian Dollar (GBP/AUD) as Wednesday’s session progressed due to economists saying that the UK economy is still on course to outperform other G-7 economies.
Earlier on Wednesday the Pound (GBP) exchange rate strengthened against all of its major peers as data out of the USA disappointed and comments by ECB Vice President Vitor Constancio weakened the Euro.
The Pound (GBP) exchange rate experienced mixed trading against its most traded peers on Wednesday and more volatility is forecast as the week progresses.
Sterling received mixed support after the Office for National Statistics released its second Gross Domestic Production (GDP) estimate. The report showed that the UK economy expanded by 0.7% as expected on a quarterly basis and by 3% on an annual basis.
Further gains as a result of the report were restrained however as it showed that business investment across the country fell unexpectedly in the third quarter of the year and exports fell due to the weakness of the Eurozone and wider global economy.
GBP/EUR Exchange Rate
The Pound advanced back above the 1.26 level against the Euro after European Central Bank (ECB) Vice President Vitor Constancio said that policy makers would consider introducing quantitative easing if current stimulus measures prove to be insufficient.
‘The comments from Constancio are likely to add to market expectations that the ECB could take further action in the coming months. This will increase the focus on the inflation data from Europe. Soft consumer price readings will put the Euro under pressure,’ said the head of European foreign exchange at Morgan Stanley.
The latest Eurozone inflation and unemployment data is due on Friday and the Pound is likely to continue to trade higher as the data release draws closer.
On Thursday the GBP/EUR exchange was set to experience volatility due to the release of a number of Eurozone data reports.
GBP/USD Exchange Rate
Sterling softened against the US Dollar on Wednesday as the UK GDP data failed to impress economists and as market attention turns to upcoming US data releases. The ‘Greenback’ had softened on Tuesday as a report showed that consumer confidence fell sharply in November but further losses were restrained as a separate piece of data showed that the world’s largest economy expanded stronger than forecast in the third quarter of the year.
The Pound softened against the US Dollar on Thursday as economists deemed the previous sessions USD losses as overdone. The US Dollar had fallen as a result of disappointing consumer confidence data.
GBP/CAD Exchange Rate
The Pound advanced against the weakened ‘Loonie’ as concerns over falling oil prices countered Tuesday’s positive domestic retail sales data. Market attention is focusing on Thursdays OPEC meeting.
GBP/AUD Exchange Rate
Against the Australian Dollar the Pound strengthened strongly as sliding iron ore prices and comments made by Reserve Bank of Australia deputy governor Philip Lowe continued to weigh heavily on the currency.
