In a quiet UK news day the Pound is little changed against major peers like the US Dollar and Euro.
Sterling fluctuated yesterday as data revealed a slowing in UK industrial production and a separate report estimated that the UK economy expanded by 0.8 per cent in February – below the pre-recession peak of 1 per cent growth.
The Pound came under additional pressure as several Bank of England policymakers attended a hearing on the UK inflation report and some dovish commentary was released.
On Tuesday Bank of England Governor Mark Carney also asserted that the central bank official who was suspended last week was not in the spotlight for sanctioning currency manipulation.
Speaking to Parliament’s Treasury Committee, Carney commented; ‘We have no information that suggests anyone at the BoE condoned manipulation of markets, facilitated, participated in market manipulation but that’s a pretty low bar.’
However, while the Pound is experiencing limited movement today, analysts have increased GBP/USD predictions to the highest for over two years.
The expectation that the Bank of England will introduce a rate increase before the US Federal Reserve has led to a Bloomberg news survey predicting that the Pound will trade at 1.62 US Dollars by the end of the year.
Although that estimation is below Sterling’s current trading level, the projection is the most upbeat since the close of 2011.
According to London-based currency strategist Lee Hardman, who was speaking exclusively to Bloomberg; ‘We continue to see economic growth remain strong in the UK this year even if it slows modestly later this year. Declining spare capacity in the UK economy may prompt the Bank of England to become the first major central bank to begin raising rates in the first quarter of 2015, providing increasing support for the Pound.’
During European trading the Pound was able to hold its own against the Euro as Eurozone industrial production was shown to have fallen unexpectedly in January.
With influential US news also lacking today, the GBP/USD pairing is likely to experience only minimal fluctuations.
Tomorrow the UK RICS house price balance report is the only piece of British news to be aware of. The report is expected to show an increase of 52 per cent in February following a gain of 53 per cent in January.
Of course investors will also be looking ahead to Friday’s UK trade balance and construction output figures.
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,1.6600 ,
Pound Sterling,,Euro,1.1964,
Pound Sterling,,Australian Dollar,1.8565,
Pound Sterling,,New Zealand Dollar,1.9631 ,
US Dollar,,Pound Sterling,0.6019,
Euro,,Pound Sterling,0.8358,
Australian Dollar,,Pound Sterling,0.5380,
New Zealand Dollar,,Pound Sterling,0.5098,
[/table]
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