With the Bank of England due to present its inflation forecast tomorrow the Pound softened against its European cousin for a third day.
The Pound Sterling Exchange Rate was in the region of 0.8494 against the Euro as of 10:50 GMT
The British currency was trading within the region of a two-week low against both the Euro and US Dollar as the European session progressed, despite an index of UK house prices rising to its highest level since mid-2010.
According to London-based currency strategist Peter Kinsella: ‘Going into the inflation report tomorrow you’ve seen some people taking off some of the long cable (meaning Pound/Dollar) positions. People who are looking at price action would look at the failure to breach 1.56 USD over the past two weeks as being a sign that upside in cable from here is rather capped.’
At the beginning of May Sterling fleetingly strengthened to 1.5606 US Dollars, an 11-week high. However, several positive US data releases and Yen developments have triggered a 1.5 per cent decline in the GBP/USD pairing this week.
Additional fluctuations can be expected to occur in response to several pieces of influential UK news, particularly tomorrow’s BoE inflation report and British employment figures.
Meanwhile the Euro briefly slipped below 1.30 against the US Dollar after German investor confidence was shown to have risen by less-than-expected in May. The ZEW index defied economists’ expectations for an advance from 36.3 to 40, instead rising by just 0.1 in May to 36.4.
In response to the result senior economist Guillaume Menuet commented: ‘It’s pretty clear that Germany has found its way back to growth. The problem is that it seems to be the only big European economy growing, and that’s why the crisis in the Euro area is far from over.’
However, a separate report revealed that industrial production in the Eurozone surged by 1.0 per cent in March, beating expectations, and the Euro consequently extended gains against its peers.
Current Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5311 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1759 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.5365 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.8509 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6533 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8494 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6510 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5408 >
(As of 10:50 GMT)
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