Economists might be expecting tomorrow’s industrial production report for the UK to show expansion, but that hasn’t alleviated any of the pressure on the Pound.
The Pound Sterling to Euro Exchange Rate was in the region of €1.1595 as of 12:00 GMT
1 Euro is currently worth 0.8626 pence
The British currency began last week trading strongly against peers including the Euro and US Dollar as positive construction, manufacturing and services PMI data for the UK painted an unexpectedly bright picture of the nation’s economic growth in the second quarter of this year.
The GBP/EUR exchange rate hit a low of €1.1554
However, the Bank of England’s hints about the likelihood of rates being held at record lows for longer than expected wore on Sterling as the week came to a close, and the Pound fell to an over three-month low against the US Dollar. The British currency also weakened modestly against the Euro, although declines were limited as the Euro also broadly softened in reaction to the European Central Bank’s rate decision/policy statement.
Tomorrow’s UK industrial production data is expected to show a gain of 0.2 per cent in May, following April’s 0.1 per cent advance. If the figure should disappoint the Pound could decline further.
As foreign exchange strategist John Hardy observes: ‘If the data begins to turn the wrong way again you have a compelling case for more Pound weakness. The Bank of England want to keep a cautious outlook and that should keep the Pound on the back foot.’
Movement in the GBP/EUR pairing is likely to occur today in response to the outcome of a meeting of Eurozone finance chiefs in Brussels.
Meanwhile, fluctuations in the GBP/USD paring could be restrained ahead of the release of minutes from the Federal Reserve’s latest policy meeting and Fed Chairman Ben Bernanke’s address.
Other UK data to watch out for this week includes: house price balance, trade balance and the NIESR GDP estimate for June.
Current Pound Sterling (GBP) Exchange Rates
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.4905 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1595 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6402 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9244 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6708 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8626 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6097 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5192 >
(As of 12:00 GMT)
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