Given the impressive performance put in by Sterling over the past five days the prospect of the currency plummeting to 1.48 against the US Dollar may seem a little dim at the moment, but industry experts Morgan Stanley are forecasting exactly that.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.5639 as of 11:10 GMT
1 US Dollar is currently worth 0.6396 pence
According to the institution, Sterling could slip by as much as 5 per cent against its American peer before the close of the year as the Bank of England continues to hint at holding interest rates at record lows despite economic improvement.
As head of global forex strategy Hans Redeker states: ‘The market is obsessed with the economic momentum, but there is a substantial output gap in the UK, which will require several years of good economic performance to close. The Bank of England will make it clear pretty soon that it is focusing on the output gap […] Expectations for the economy have risen significantly over the past four weeks. Given the amount of positive surprises so far, it’s unlikely that further data will add to current expectations.’
The GBP/USD exchange rate hit a high of 1.5645
Despite this prediction, the Pound continues to trade strongly against its peers today.
Sterling began the European session primed for a five-day gain of 0.8 per cent against both the US Dollar and Euro.
Yesterday considerably better-than-expected retail sales figures for the UK pushed the Pound to an 8-week high against the US Dollar, and the British currency has only softened moderately since then.
After Eurozone CPI data was published, and met expectations, the Pound posted a modest gain on the Euro.
During the North American session GBP/USD movement could be triggered by the release of US housing starts and consumer confidence figures.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5639 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1729 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7066 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9373 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6396 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8526 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5858 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5178 >
(As of 11:10 GMT)
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