Ahead of the release of minutes from the Bank of England’s latest policy meeting the Pound to Euro exchange rate was trading close to a seven-week high.
Sterling was also enjoying a bullish relationship with the US Dollar as investors bet that the UK’s economic performance will exceed that of its G10 rivals.
Initial reports put UK first quarter economic growth at 0.7 per cent, although some economists believe expansion of 0.9 per cent is a possibility.
As Steve Barrow of Standard Bank notes; ‘Our indicators for the Pound have become more positive in recent days.’
The GBP to Euro pairing even held on to its advance against the Euro as economic data for the Eurozone surprised to the upside.
Before the close of European trading a report showed that consumer confidence in the Eurozone jumped to an over six year high in April.
While economists had expected the measure of household sentiment to hold at -9.3 in April, the measure actually advanced to -8.7.
The report indicates that although inflation and unemployment concerns continue to dog the Eurozone, its residents are becoming increasingly confident that there is light at the end of the tunnel.
According to Frankfurt-based analyst Christoph Weil; ‘Consumer confidence is on a rising trend. There is a strong correlation between the unemployment rate and consumer sentiment, so improvements in the labour market are boosting confidence, helping the economic recovery gain momentum’.
The Euro was little-changed after the report was released.
Earlier today separate data showed that the pace of construction output in the Eurozone slowed in February, with output climbing by just 0.1 per cent month-on-month following January’s 1.6 per cent advance.
Tomorrow the main causes of GBP/EUR movement are likely to be BoE minutes, UK public finance figures and Markit services/manufacturing PMI for the Eurozone and its largest economies.
The Markit figures are expected to show that the pace of manufacturing expansion increased in Germany and held steady in the Eurozone while services PMI also advanced.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6821 ,
Pound Sterling,,Euro,1.2197,
Pound Sterling,,Australian Dollar,1.7963,
Pound Sterling,,New Zealand Dollar,1.9540 ,
US Dollar,,Pound Sterling,0.5945,
Euro,,Pound Sterling,0.8199,
Australian Dollar,,Pound Sterling,0.5567,
New Zealand Dollar,,Pound Sterling,0.5118,
[/table]
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