The Pound posted a modest advance against its European rival this morning as several pieces of UK data trumped expectations. However, gains against the Euro were limited following the publication of a report which showed that the unemployment rate in the Eurozone came in at 12.1 per cent in May rather than the 12.3 per cent expected.
The Pound Sterling Exchange Rate was in the region of 1.1682 against the Euro as of 10:20 GMT
1 Euro is currently worth 0.8560 pence
Although comments issued by Mervyn King, former Governor of the Bank of England, regarding ongoing weakness in the UK economy wore on the Pound last week, several pieces of positive domestic data released this morning have indicated that the nation’s economic recovery might be gathering momentum.
Earlier today a Hometrack Ltd housing report showed that average home values in England and Wales climbed by 0.4 per cent last month, making a fifth consecutive month of gains.
Separate data then showed that the UK’s manufacturing sector expanded by the most for over two years last month.
According to Markit/CIPS manufacturing PMI, in June the index rose from May’s upwardly revised 51.5 to 52.5.
Economists had forecast a reading of 51.5.
The result is the strongest recorded since May of 2011.
In a statement issued with the report Senior Markit Economist Rob Dobson asserted: ‘The UK manufacturing sector made positive strides on the recovery path during the second quarter of the year. June saw output and new order growth hit rates not seen since early-2011, as a brightening domestic market and resilient overseas demand led to a broad-based expansion across the sector. The near-term outlook for output also remains on the upside […] Job creation is still weaker than hoped for, but this should improve if solid demand growth is sustained and eats into spare capacity […] Taken with recent signs of service sector strength and a stabilising construction industry [the manufacturing figures paint] a picture of UK economic growth picking up from the opening quarter’s 0.3 per cent to at least 0.5 per cent.’
Meanwhile, separate figures showed that net lending on dwellings fell to 0.3 billion in May (far below the 0.8 billion forecast) while mortgage approvals unexpectedly rose to 58.2K from 54.4K.
After the data was published the Pound rose against several of its peers, including the Euro and US Dollar.
The GBP/EUR exchange rate hit a high of 1.1727
Advances were limited however as Mark Carney, former Governor of the Bank of Canada, officially took over the role of the Governor of the Bank of England.
Although the BoE isn’t expected to make any dramatic decisions when it meets this week, it is believed that with Carney at the helm the central bank will attempt to speed up the UK’s economic recovery.
In reference to the BoE’s imminent meeting, Dobson noted that in light of the unexpectedly strong manufacturing result it ‘seems increasingly unlikely that the Bank of England’s policy makers will opt for further asset purchases at its meeting later this week’.
Tomorrow’s UK news of interest is construction PMI for June. Economists are expecting the index to have climbed from 50.8 in May to 51.2 last month.
Current Pound Sterling (GBP) Exchange Rates
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5235 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1682 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6612 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9625 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6563 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8560 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6035 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5102 >
(As of 10:30 GMT)
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