Pound Sterling (GBP) Exchange Rate rises beyond 1.21 against the Euro (EUR)

The Pound advanced back above the 1.21 level against the Euro on Friday as the single currency remained under pressure from yesterdays dovish comments made by the European Central Bank and as a report showed that new car sales in the UK hit a 10-year high in March.

Against other major peers the Pound was either little moved or softer as investors took a wait and see approach to today’s session as they await the publication of eagerly anticipated US jobs data.

The Pound was weighed upon by data which showed that the Halifax house price index declined by 1.1% in March. Economists had been expecting a 0.7% rise. The data was also a steep drop from the previous month’s increase of 2.4%. On an annual basis prices jumped 8.7% in the first quarter of the year, the biggest rise since October 2007.

Losses from the house price data were limited after the Society of Motor Manufacturers and Traders (SMMT) released a report which showed that the number of new cars sold in the UK rose to a decade high.

464,824 new car registrations were recorded last month, a rise of 17.7% compared to the previous year. The sales figure was also the second-highest on record since the introduction of twice-yearly car registrations in 1999. In the three months leading up to March, car sales rose 13.7% to 688,122, the SMMT added.

“The March sales figures were extremely good news for the UK car industry. They should give a significant boot to the UK’s overall economic growth prospects for the first three months of the year,” said Howard Archer, chief UK and European economist at HIS Global Insight.

Sterling is likely to experience volatility late in the session when the US nonfarm payrolls data is released. A positive report will send the US Dollar higher against Sterling.