The Pound has put in a bit of a mixed performance this week, gaining on its rivals in response to UK growth figures on Tuesday but trimming its advance after Bank of England Governor Mark Carney stressed that interest rates would be held at record lows for longer.
However, while Sterling continues to trade lower against a buoyed US Dollar the British currency has strengthened against the Euro thanks to an unexpectedly upbeat consumer confidence report for the UK.
The GfK consumer sentiment index advanced from -13 to -7 in January instead of merely edging up to -12 as forecast.
The result was the most impressive for six years and helped the Pound secure a monthly gain of 0.9 per cent against the Euro.
In a statement issued with the figure GfK Managing Director Nick Moon observes; ‘January saw a dramatic return to the rapid improvement seen last summer, with a 6 point rise. This more than cancels out the recent falls […] All this is good news for the Government […] Growing confidence should manifest itself in greater spending’.
Meanwhile, a UK industry report issued this morning revealed that new-home building in Britain hit its highest level since 2007 in 2013, with new home registrations surging by 28 per cent. Although this level is still well below demand, it is a sign that something is being done to tackle Britain’s housing crisis.
The Pound was little changed against the US Dollar this morning as the US asset remained supported by this week’s Federal Open Market Committee announcement and fended off losses inspired by an unexpected increase in US initial jobless claims.
GBP/EUR gains were aided by the news that German retail sales unexpectedly plummeted in December, with a month-on-month decline of 2.5 per cent.
A separate report showed that the Italian unemployment rate declined from a negatively revised 12.8 per cent in November to 12.7 per cent in December.
The pairing is likely to experience further movement as the day continues and Eurozone inflation and unemployment figures are released.
Next week the most notable UK reports scheduled for publication include manufacturing PMI, services PMI, the Bank of England rate decision, trade balance figures, industrial/manufacturing production data and the NIESR GDP estimate for January.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6457 ,
Pound Sterling,,Euro,1.2146,
Pound Sterling,,Australian Dollar,1.8790,
Pound Sterling,,New Zealand Dollar,2.0221 ,
US Dollar,,Pound Sterling,0.6075,
Euro,,Pound Sterling,0.8233,
Australian Dollar,,Pound Sterling,0.5323,
New Zealand Dollar,,Pound Sterling,0.4952,
[/table]
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