After hitting multi-month and multi-week lows against the Euro and US Dollar in recent days, Sterling was finally able to enjoy a rebound in reaction to positive UK developments.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1478 as of 12:30 GMT
1 Euro is currently worth 0.8713 pence
Before the BOE’s rate decision the Pound was able to post a modest gain against the Euro for the first time in eight days as a gauge of UK manufacturing climbed by more than expected last month.
A gauge of manufacturing published by Markit Economics and the Chartered Institute of Purchasing and Supply rose from a revised 52.9 to 54.6 in June. Economists expected the index to slip to 52.8 in July.
The result was the best recorded for 28 months, and in a statement published with the figures senior Markit economist Rob Dobson asserted: ‘Today’s data provides positive news across the growth, priced and job fronts, as manufacturing output and new orders expanded at the fastest rates since February 2011, price pressures remained relatively subdued and the pace of payroll expansion hit a two-year high.’
Dobson continued: ‘The sector looks to be building on the foundation of the second quarter’s 0.4 per cent return to growth reported by the latest official data, with the July PMI survey also showing an improvement in forward looking indicators.’
In reference to the BoE policy meeting Dobson commented: ‘it is unlikely that the BoE MPC will announce any substantive change in policy direction at today’s press conference on the back of those numbers, preferring instead to wait and see if the broader economic recovery takes a firmer hold.’
And Dobson’s assertion proved correct. The BoE opted to maintain the current level of bond buying and held the benchmark interest rate at the record low of 0.5 per cent.
Investors will now be looking ahead to next week, and the publication of minutes from the Monetary Policy Committee meeting, to see whether new BoE Governor Mark Carney continues to have the full support of his compatriots.
The GBP/EUR exchange rate hit a low of 1.1370 pence per Euro
Following the BoE decision economist David Tinsley observed: ‘It is getting increasingly hard not to judge that the UK growth outlook is at an inflexion point, or even perhaps at “escape velocity” as Mark Carney describes it. Increasingly the talk is going to be of policy’s role in sustaining the recovery rather than in trying to get growth moving.’
In the aftermath of the BoE announcement the Pound reversed an earlier decline against the US Dollar and strengthened modestly against the US Dollar.
Current Pound Sterling (GBP) Exchange Rates:
< Down > Up
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5192 <
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1478 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6937 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9141 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6581 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8713 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5913 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5226 <
(As of 12:30 GMT)
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