Chancellor of the Exchequer George Osborne might have delivered a positive Autumn Statement yesterday, and growth forecasts for the UK might have been upwardly revised, but the Bank of England’s decision to hold interest rates at record lows and leave the level of bond buying unaltered pushed the Pound lower against its peers.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1967 as of 10:35 GMT
Overnight the Pound slipped against rivals like the US Dollar and Euro and the British asset was in-line to post a five-day decline against both of these currencies as European trading began.
However, a surprisingly upbeat UK housing report helped Sterling recoup losses against the Euro.
While economists forecast a seasonally adjusted month-on-month increase of 0.8 per cent in UK house prices they actually surged by 1.1 per cent in November and were up 7.7 per cent on the year.
The result prompted this response from London-based forex strategist Ian Stannard; ‘On the Sterling front, the relative-growth picture in the UK is quite an important factor. A lot of the growth we’ve seen is coming from the housing sector and there’s hope that will then feed through to the consumer sector as well. That’s why that is having an initial positive impact on Sterling.’
1 Euro is currently worth 0.8356 pence
Although gains against the US Dollar were limited ahead of today’s US non-farm payrolls report, the Pound was able to pare its previous 0.7 per cent weekly decline against the Euro.
The British currency experienced modest movement after the Bank of England’s inflation expectation report was released.
According to the BoE, the number of people anticipating a rate increase within the next year increased over the past three months, largely due to the populace becoming more confident in the UK’s economy recovery.
Inflation expectations for the year ahead increased from 3.2 per cent in August to 3.6 per cent in November.
The report also showed that people are more satisfied with the BoE’s performance. Approval of the BoE’s actions climbed from 15 per cent to 23 per cent.
The GBP/EUR pairing may experience additional movement as a result of German factory orders data, but investors will largely be focusing on the highly influential US non-farm payrolls figure.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6355 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1967 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.8055 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9977 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6115 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8356 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5541 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5017 <
(As of 10:35 GMT)
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