The Pound had another strong week last week as confidence builds that the UK economy is firmly on track to make a strong recovery.
The start of the week was relatively mixed for the currency as on Monday Sterling dropped slightly after new mortgage data came in below forecasts. A report by the British Banker’s Association said that the number of new mortgages approved in October fell to 42,800 from September’s revised total of 43,200, which was the highest since December 2009.
The Pound then spent most of Tuesday’s session little moved against the Euro but did manage to edge higher against the US Dollar after consumer confidence data out of the USA came in below economist forecasts. Sterling was weighed down slightly by comments made by Bank of England Governor Mark Carney who in a testimonial to parliament said that the BOE’s target of 7% unemployment rate didn’t necessarily mean that once reached it would immediately raise interest rates.
Midweek saw the release of the UK’s latest GDP data. The report came in as expected but the response on the currency market saw the Pound soar against its peers. Against the Euro it breached the 1.20 mark to reach its highest level in eleven-months and against the commodity based currencies of the Australian, Canadian and New Zealand Dollars the currency soared beyond three-year highs.
Thursday was a relatively quiet day on the markets due to US traders being off work due to the Thanksgiving holiday. The closure of the US markets had little impact on Sterling which continued to trade strongly against its peers.
As the week came to a close the Pound achieved a fourth-weekly gain against the US Dollar and other peers. Data released early in the session supported the currency further as house prices rose more than forecast on a yearly basis whilst on a monthly basis they softened slightly.
Today the Pound surged higher following the publication of PMI data which showed that manufacturing activity in the UK soared to a 33-month high. The PMI came in at 58.4 in November, beating forecasts for a reduction to 56.0. Any figure above 50 indicates expansion. A breakdown of the survey showed new orders jumped to 64.6 – the highest in almost 20 years – from 61.3 in October. Output and employment also jumped sharply.
Against the US Dollar Sterling hit a fresh 27-month high and against the Euro it remains close to its highest level since January.
The Pound looks likely to strengthen further throughout the course of the week as upcoming Construction PMI, House Price, Services PMI and Manufacturing Production data reports all look set to come in strongly.
Key events for the week ahead
Tuesday December 3rd 2013 – Halifax House Price Index
Construction PMI
Wednesday December 4th 2013 – Services PMI
Thursday December 5th 2013 – BOE Interest Rate Decision
Friday December 6th 2013 – Manufacturing Production
Current Pound Sterling (GBP) Exchange Rates:
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: 1.2095
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7952
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 2.0041
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6100
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8265
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5569
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.4990
(As of 10:45 am GMT)
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