Prior to the publication of UK services PMI the Pound was trading in the region of a month low against a bullish US Dollar and was little changed against the Euro. However, the British currency broadly strengthened after the PMI data proved to be surprisingly strong.
The Pound Sterling Exchange Rate was in the region of 1.1720 against the Euro as of 10:00 GMT
1 Euro is currently worth 0.8529 pence
Industry experts expected the gauge of services to slip to 54.5 in June from 54.9 in May. However, the index actually climbed to 56.9, taking the level well beyond the 50 mark separating growth from contraction.
The rise in activity was the most rapid recorded for more than two years.
In response to the data Chris Williamson, a chief economist with Markit, stated: ‘Surging growth in the service sector accompanied a resurgent manufacturing sector and modest growth in construction in June for an increasingly broad-based economic upturn. Growth in services and manufacturing is now the strongest for just over two years, while the construction sector is enjoying the fastest pace of expansion for over a year. The buoyant picture for June means the economy is on course to expand by at least 0.5 per cent in the second quarter, with more growth to come. New orders and job creation across all sectors are now rising at the fastest rates for almost six years, led by the vast services economy, boding well for robust growth momentum to be sustained as we move into the second half of the year.’
The GBP/EUR exchange rate hit a high of 1.1744
However, gains in the Pound/US Dollar pairing were restrained ahead of tomorrow’s highly anticipated Bank of England policy meeting, Mark Carney’s first as Governor. Positive US news is also helping to keep the Dollar bullish against its peers.
Although some industry experts are expecting Carney to adopt a more aggressive approach than his predecessor for tackling the country’s economic concerns, as Williamson notes: ‘With growth this strong it’s hard to see how any of the members of the Monetary Policy Committee could make a case for further quantitative easing. Policy makers are likely to argue that any action could perhaps be better geared towards trying to ensure the upturn is fully sustainable, such as measures to further encourage bank lending and investment.’
The Pound’s advance on the Euro was aided as the common currency broadly softened in response to some worse-than-anticipated economic news for the currency bloc and fears that the Portuguese government might be on the brink of collapse.
Separate figures released by the Bank of England showed that UK banks supported mortgage availability and lowered borrowing costs in the second quarter of the year.
Current Pound Sterling (GBP) Exchange Rates
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5156 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1720 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6711 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9596 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6597 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8529 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5985 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5096 <
(As of 10:00 GMT)
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