Sterling is marching towards another five-day gain against the US Dollar this week as better-than-expected UK employment data, coupled with optimistic comments from the Chancellor of the Exchequer and Bank of England Governor, brightened Britain’s economic prospects and boosted the Pound.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1897 as of 10:50 GMT.
Before the release of UK construction data the Pound was trading close to a 7-month high against the US Dollar and was within touching distance of its strongest level since January against the Euro .
The currency went on to extend gains as the report revealed that UK construction output accelerated at its fastest rate for three months in July.
According to Office for National Statistics figures, construction was up 2 per cent year-on-year and 2.2 per cent month-on-month. Economists were expecting a YoY gain of 1.3 per cent and a MoM advance of 2.1 per cent.
The quarterly gain in construction output of 1.4 per cent previously recorded was upwardly revised to 1.9 per cent. As construction accounts for 6.3 per cent of total GDP, this revision will have a ‘minimal’ impact on second quarter GDP (which climbed by 0.7 per cent).
1 Euro is currently worth 0.8405 pence
And the good news continued as economists increased their growth forecasts for the UK. Estimates for growth of 1 per cent in 2013 and 1.7 per cent in 2014 have been upwardly revised to 1.3 per cent and 2 per cent respectively.
If these predictions prove accurate, 2014 growth will be the most significant since 2007 – before the global economic crisis took hold.
However, if the UK economy continues to recover at the pace seen in recent weeks, BOE Governor Mark Carney’s intention of raising interest rates when unemployment reaches 7 per cent may have to be revised.
As economist Jens Larsen observes; ‘The consensus forecast has moved a long way very, very quickly. If you get a powerful recovery, the arguments for guidance, for the extended period of low rates, just look so much weaker. It’s a bit of a communication challenge.’
Before the weekend begins the GBP/USD pairing could experience additional movement as a result of today’s US retail sales and sentiment data. Positive developments for the world’s largest economy could see the Pound pare its weekly gain against the ‘Greenback’.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5810 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1897 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7103 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9463 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6326 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8405 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5847 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5138 <
(As of 10:50 GMT)
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