After the Bank of England presented its inflation forecast the Pound posted gains against the majority of its most traded peers, notably climbing against the Euro for the first time in several days.
The Pound Sterling Exchange Rate was in the region of 0.8453 against the Euro as of 14:40 GMT
The currency had already recorded gains against the US Dollar on better-than-expected employment news, with UK jobless claims dropping by 4,300 more than economists’ envisaged.
In light of the doom, gloom and pessimism which seemed to dominate UK economic news last year, the last few weeks of more positive data and projections have been a welcome relief. It seems, at last, that recovery is ‘in sight’ – well, according to Bank of England Governor Mervyn King anyway.
The BoE’s inflation report estimated that the UK could record growth of 0.5 per cent in the second quarter, following on from the first quarter’s larger-than-forecast 0.3 per cent expansion.
In fact, the growth projections for the next three years have been upwardly revised, while the BoE now expects inflation to peak at 3.1 this year – lower than the previous estimate.
As the report was published King stated: ‘There is a welcome change in the economic outlook. We don’t see a particularly rapid recovery in the next few quarters, but we do see a recovery and I think there are good reasons for that.’
In response to the Pounds movement in the aftermath of the report one London-based currency strategist noted: ‘The pound is reacting to the headlines on slightly higher growth and lower inflation forecasts from the Bank of England. It fits with the run of UK data we’ve had recently. There’s a sense that some of the worst is over, but the economy is still flatlining.’
A lack of influential UK news over the rest of the week could limit Sterling movement, but the currency could fluctuate in response to global economic developments.
Current Pound Sterling (GBP) Exchange Rates
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5233 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1830 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.5386 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.8538 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6570 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8453 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6502 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5411 >
(As of 14:40 GMT)
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