In a positive week for the UK the Pound is heading for a five-day gain against its US counterpart and the GBP/EUR’s third consecutive weekly advance.
Yesterday Sterling rallied against its peers, hitting an over three-year high against the Australian Dollar, as UK economic reports trumped expectations and a Bank of England official issued optimistic comments.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.6192 as of 11:10 GMT
In the aftermath of the publication of reports which showed that UK factory orders surged to an 18-year high while the UK’s budget deficit narrowed the Pound broadly strengthened.
Additional gains were recorded as BoE policymaker Spencer Dale dismissed housing bubble concerns and intimated that interest rates may be held at record lows for the foreseeable future.
While Dale presented a rather cautious outlook, his remarks reiterated those offered by Deputy Governor Charlie Bean, who said that UK wages should finally start rising next year and that the economy is ‘off the ropes’.
Dale stated; ‘We had a very deep recession. We have a number of years where the economy hasn’t grown. I think we will need to see a number of years of strong, sustained growth until the economy starts to feel more normal again. I expect to keep interest rates low for a sustained period, until we’ve seen a sustained period of strong growth, higher levels of output firms’ orders books filling up, and levels of unemployment falling.’
1 US Dollar is currently worth 0. 6176 pence
As the UK economic recovery has been gathering momentum faster than many anticipated, the odds of unemployment reaching the BoE’s 7 per cent target before 2016 have increased, indicating that a rate hike could occur sooner than the BoE initially estimated.
However, with officials like Dale offering reassurances concerning rate increases the Pound is benefitting.
According to London-based currency strategist Valentin Marinov; ‘Going into next week we expect the upcoming UK data to highlight the resilience of the economic recovery and corroborate the view that the Bank of England would be moving towards removing policy accommodation before long. All that should keep Sterling supported for now.’
Economists are expecting next week’s UK economic data to add to the nation’s brightening prospects.
UK reports to look out for include; BBA Loans for House Purchases, Nationwide House prices, UK GDP, the Lloyds Business Barometer, the GfK Consumer Confidence survey and Net consumer credit data.
It is forecast that the GDP report will show that the UK’s economy expanded by 0.8 per cent in the third quarter following growth of 0.7 per cent in the second.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6192 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1980 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7677 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9752 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6176 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8348 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5658 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5069 >
(As of 11:10 GMT)
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