The Pound surged against a number of its most traded peers last week as data continued to support and as the Bank of England improved its growth forecast for the UK economy.
The start of last week was a positive one for the Pound as reports showed that business optimism hit a 22-year high and as an employment index climbed to its highest level since the middle of January 2008. Things continued to go well for the currency on Tuesday after the British Retail Consortium released data which showed that annual retail sales surged by 3.9% in January. The data marked the fastest rise in sales since 2011 adding further credence that the UK economy is well on the way to recovery.
The biggest mover for the currency however came on Wednesday when Bank of England governor Mark Carney outlined a new forward guidance policy and declared that interest rates won’t be raised for at least another year. The BoE also revised its growth forecasts higher saying that it now expects the UK economy to expand by 3.4% over the course of the year, a sharp jump from the 2.8% rise suggested previously.
As a result of the meeting the Pound climbed above 1.22 against the Euro and 1.65 against the US Dollar.
As the week drew to a close the currency climbed to a 3-year high against the US Dollar after a report showed that the UK’s construction sector grew by 2% on a month-by-month basis.
Looking to today the Pound climbed to a four-year high against the US Dollar after a report showed that UK house prices increased this month. House prices climbed 3.3% after rising 1% in January, property-website operator Rightmove Plc said.
Sterling also pushed beyond a one-year high against the Euro. The currency also made gains against the rest of its most traded peers as expectations also increased that the Bank of England will increase interest rates sooner-than-expected due to the recent run of positive data releases.
With a lack of data releases and the US markets closed for the President’s Day holiday the Pound is likely to remain at or close to its recent highs throughout the session. Tuesday will likely create some volatility for the currency as inflation and retail price index reports will be released.
Current Pound Sterling (GBP) Exchange Rates:
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6743 ,
Pound Sterling,,Euro,1.2213 ,
Pound Sterling,,Australian Dollar,1.8541 ,
Pound Sterling,,Canadian Dollar,1.8352,
[/table]
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