Although last week saw the publication of positive UK data, including Friday’s upbeat construction output report, the Pound ended the week slightly softer against peers like the Euro and US Dollar as comments issued by an industry official earlier in the week continued to take a toll.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.6303 as of 11:20 GMT
After Bank of England policy maker Martin Weale implied that UK inflation has declined steeply since the summer the Pound tumbled against its major rivals and has struggled to recover its footing ever since.
While the Pound was able to edge away from a two-week low against the US Dollar on Monday, gains were limited ahead of tomorrow’s UK inflation report and the upcoming Federal Open Market Committee policy meeting.
As European trading got underway Sterling strengthened for the first time in four days, posting a modest gain against the ‘Greenback’ in spite of a report showing a decline in UK house prices.
1 US Dollar is currently worth 0.6129 pence
The British currency advanced to 1.6327 against the US Dollar even after Rightmove data revealed a 1.9 per cent monthly decline in asking prices in December.
As currency strategist Jane Foley highlighted; ‘The market is worried that tapering from the Fed could come this week. Recent data out of the US, including payrolls, have been decent.’
Today’s US preliminary PMI and industrial/manufacturing production reports are expected to support the case for the Federal Reserve trimming the level of asset purchases, but the ‘Greenback’ still softened against several of its currency counterparts during the European session as speculation mounts.
Meanwhile, positive economic data for the Eurozone ensured that the GBP/EUR pairing remained bearish.
Of course, while tomorrow’s UK inflation figures are likely to trigger Pound movement, the FOMC announcement on Wednesday can be expected to cause widespread market fluctuations.
Key UK data for the week ahead:
Tuesday: UK Producer Price Output
UK Consumer Price Index
UK Retail Price Index
Wednesday: Bank of England releases minutes from policy committee meeting
UK Jobless Claims Change
UK ILO Unemployment Rate
UK Employment Change
Thursday: UK Retail Sales
Friday: UK Final Third Quarter GDP
Current Pound Sterling (GBP) Exchange Rates:
< Down > Up
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6303 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1833 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.8252 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9775 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6129 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8452 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5487 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5059 <
(As of 11:20 GMT)
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