GBP/USD dips while GBP/EUR modestly rises. Meanwhile Briton’s inflation expectation’s reach 3.6 per cent.
The Pound Sterling Exchange Rate was in the region of 1.5019 against the US Dollar as of 10:14 am
In recent weeks the UK has seen a mixed bag of data, with disappointing manufacturing and construction figures slightly offset by an unexpectedly strong services report.
With the threat of an unprecedented triple-dip recession lingering, proponents of the fiscal measures currently adopted by the government have been as vocal as the detractors while policy makers attempt to forge the right path to recovery.
The uncertain outlook has caused the Pound to decline markedly in recent weeks, shedding 6.1 per cent so far this year, and the currency continued to fall yesterday.
Although Sterling initially gained after the Bank of England held rates and left policy unaltered, it later fell to a fresh 2 ½ year low against the US Dollar and is now heading for fourth weekly decline against the American currency.
The Pound was able to climb on the Euro however, despite the common currency broadly strengthening after European Central Bank President Mario Draghi triggered a bout of risk-taking with his optimistic forecast for Eurozone recovery.
And although a survey compiled by the Bank of England revealed that Briton’s expect inflation to be higher over the year ahead, Sterling posted additional, modest gains on the Euro this morning prior to the release of German industrial production figures.
The BOE’s inflation attitudes survey for February showed that the British public’s inflation expectations for the next twelve months rose from 3.5 per cent in November (when the last poll was taken) to 3.6 per cent.
Any members of the BoE’s Monetary Policy Committee who pushed for more stimulus in this month’s meeting may be concerned by this news, but the majority of the committee believe that refraining from further easing will help lower the above-target inflation.
Inflation has held at 2.7 per cent for the past four months.
The Pound could see additional declines against the US Dollar this afternoon if American employment data meets or exceeds expectations.
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