As the week progresses the Pound continues to trade strongly against the majority of its main peers. The bullish British asset retained gains recorded against rivals like the US Dollar and Euro overnight as the UK economic recovery gathers momentum.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.6315 as of 11:05 GMT
Yesterday growth data confirmed that Britain’s economy expanded by 0.8 per cent in the third quarter and was up 1.5 per cent on the year, despite a 2.4 per cent quarterly drop in exports and a smaller-than-expected increase in imports.
The result helped push the Pound to an almost 10-month high against the US Dollar.
As one Milan-based senior currency strategist noted; ‘We’ve seen mixed UK data but overall it’s fair to say the UK economy is performing well. The Pound drew strength from that and the fact that the Dollar is broadly weaker’.
1 US Dollar is currently worth 0.6132 pence
However, the GBP/EUR pairing did go on to fluctuate as European trading progressed and Lloyds UK business barometer fell from 63 in October to 50 in November. Better-than-forecast confidence data for the Eurozone also lifted the Euro ahead of German inflation data.
News that inflation in Spain accelerated by more than expected this month gave the Euro a boost earlier in the local session.
But GBP/EUR losses were limited by the expectation that tomorrow’s index of UK consumer confidence will show improvement while a second report confirms an increase in mortgage approvals.
Pound support also came in the form of the Bank of England’s semi-annual Financial Stability Report.
The BoE asserted that the Funding for Lending Scheme (which has promoted fears of a potential housing bubble) will be reigned in and refocus on supporting small businesses. This decision is a confirmation of the improvement seen in the UK housing market.
BoE Governor Mark Carney commented; ‘Although the growth in household loan volumes remains modest, activity is picking up and house price inflation appears to be gaining momentum. We should refocus the FLS so that it continues to support lending to the business sector, without adding further broad support to household lending at a time when that is no longer necessary.’
The BoE also stated; ‘Stability risks remain, including from the high indebtedness of some sovereigns, corporate and households. A sharp rise in interest rates, especially if not associated with a strengthening in incomes, could text financial system resilience.’
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6315 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1998 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7851 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9999 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6132 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8328 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5601 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5002 <
(As of 11:05 GMT)
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