In yet another sign that the UK’s economic recovery is outstripping even the most optimistic of expectations, the nation’s construction PMI for November came in significantly above estimates. Sterling consequently enjoyed widespread gains and pushed above a two-year high against the US Dollar.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.6396 as of 11:00 GMT
Although UK BRC like-for-like retail sales disappointed, showing a year-on-year increase of 0.6 per cent rather than the 1.1 per cent gain envisaged, Pound losses were limited as the British asset remained supported following yesterday’s unexpectedly impressive manufacturing data.
Later in the European session a measure of UK construction achieved 62.6, up from the previous month’s 59.4 and better than the 59.0 forecast.
The figures detailing the seventh consecutive monthly increase in construction output were accompanied by the following comments from Markit economist Tim Moore; ‘Construction activity continues to spring back to life during the final months of 2013. Sustained improvements in infrastructure and residential building helped keep the sector on a strong recovery path in November […] job creation picked up again in November and confidence about the business outlook reached its highest level since September 2009.’
However, Moore did add; ‘while construction’s current growth trajectory may be the steepest for over six years, there is still a huge loss of output to recoup before the sector reaches its pre-recession peek’.
1 US Dollar is currently worth 0.6097 pence
In the hours following the data publication the Pound rallied against the Euro and US Dollar while extending gains against the Australian and Canadian Dollars.
In other European news, producer prices in the Eurozone fell for a third month in October, dropping at a more rapid rate than economists forecast as a result of a steep drop in energy costs.
Given that the Bank of England is due to deliver its rate decision this week, and that many industry experts believe the central bank will be pushed into raising interest rates earlier than planned, today’s positive UK news is of particular interest.
Tomorrow sees the release of UK services PMI. As the services sector contributes the most to overall GDP this report is the most important of the three released this week.
Economists have forecast that the measure of services edged down from 62.5 in October to 62.0 in November.
UK Halifax house price and BRC shop price reports could also have a modest impact on the Pound.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6396 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.2086 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7981 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9947 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6097 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8269 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5560 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5009 >
(As of 11:00 GMT)
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