The Pound has risen to a 20-month high against the Euro and reached a six month high versus the US dollar. The pound remains a popular alternative to the troubled Euro and is expected to receive more gains.
The rise comes after a week of positive reports about the UK economy. The bank of Englands decision not to carry out more quantitative easing and the meeting of its 2011 debt target have all helped.
The good news out of the UK is in stark comparison to the news out of the Eurozone. Political uncertainty in France and the Netherlands, predictions of a tougher than expected recession in Greece, and the continuing debt troubles of Spain and Italy, have all contributed to expectations that the sterling will reach 80 pence per euro.
Any further gains for the Pound would see it match its high peak of 80.67pence in 2010, levels not seen since the collapse of Lehman Brothers. If the situation in the UK continues to improve then it is possible that the pound could strengthen to 76pence in 12 months.
The pound rose to a six month high against the dollar to $1.615, but is expected to struggle on making any further gains thanks to an improving US economy although it is expected to remain above the 1.6 mark.
Tomorrow’s data on Britain’s GDP will show whether the country has avoided slipping into recession. The report is expected to show that the British economy has grown by 0.1%. Concerns that the report may show a contraction will affect the Pound but only temporarily thanks to the continuing situation in the Eurozone.
The Pound to US Dollar Exchange Rate is 1.6145
The Pound to Australian Dollar Exchange Rate is 1.5640
The Pound to New Zealand Dollar Exchange Rate is 1.9790
The Pound to Japanese Yen Exchange Rate is 131.0900
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