Yesterday’s rate decisions from the Bank of England and European Central Bank left the Pound trading at an over four-month high against the Euro.
Although both central banks opted to hold rates at record lows, as forecast by economists, ECB President Mario Draghi delivered a more pessimistic than expected statement regarding the Eurozone’s economic recovery. The Euro declined against the Pound as a result and Sterling began the European session poised for a 1.4 per cent gain on the common currency.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1862 as of 10:30 GMT
Sterling derived additional support from data published by Halifax this morning. The report showed that house prices climbed for a seventh month in August, and the lender expressed confidence that prices will continue to rise for the rest of 2013.
Halifax economist Martin Ellis stated; ‘Economic improvement and low interest rates, supported by official schemes such as funding for Lending and Help to Buy, appear to have boosted housing demand.’ Although he did add, ‘Nonetheless, relatively modest economic growth and below-inflation rises in earnings are likely to act as a brake on the market.’
This report was followed by another which showed that UK manufacturing production climbed in July for a second month.
1 Euro is currently worth 0.8427 pence
The 0.2 per cent advance in factory output follows a gain of 2 per cent in June and is another sign that the UK’s economic recovery is on the right track.
The results also backed economists’ forecasts. However, with the surprisingly warm summer limiting energy demands, industrial output unexpectedly stagnated.
Before the data was published London-based economist Howard Archer stated: ‘Manufacturers will be hoping that the recent extended good news on the UK economy further lifts business and consumer confidence which in turn translates into sustained higher demand. Although global economic conditions are still challenging, the prospects for UK manufacturing export orders are being helped by the Eurozone finally exiting recession.’
However, it hasn’t been all good news for the UK this week as exports fell and Britain’s goods-trade deficit expanded to 9.85 billion Pounds – almost a year high.
After the figures were released Sterling stumbled against the Euro for the first time in seven says, paring its five day gain to 1.1 per cent.
The Pound also weakened slightly against the US Dollar. Although the British currency is currently in line to post a weekly gain of 0.5 per cent against the ‘Greenback’ today’s US non-farm payrolls will be a major driver of market movement, and additional GBP/USD movement can be expected to occur in the hours ahead.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5583 <
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1862 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7047 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9630 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6420 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8427 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5866 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5091 >
(As of 10:30 GMT)
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