The Pound continued to have a relatively strong week in one which was dominated by events in the United States. As investor attention was mainly focused on the Federal Reserve the Pound continued to do well against its peers due to the release of a number of positive economic data releases.
At the start of the week Sterling was a little subdued by the release of inflation data which showed that inflation slowed to an unexpected four-year low. The news caused the Pound to soften beyond a one-month low against the Euro. The report supported comments made by a Bank of England policy maker earlier in the month who warned that inflation had dropped sharply over the summer.
The following day saw the Pound rebound against the Euro and saw the currency leap against the majority of its most traded peers due to the release of unemployment data which showed that the number of UK citizens out of work fell to an over four-year low. The currency was prevented from climbing higher however after the Bank of England issued a warning over the strength of the Pound.
By mid-week Sterling had jumped to a two-week high against the Euro and pushed higher against its most traded peers. Positive UK retail sales data showed that sales increased by 2% year-on-year and by 0.3% on a month-by-month basis, the best figure recorded since 2010.
Against the US Dollar the Pound soared to a 27-month high after the Federal Reserve announced a tapering of $10 billion to its monetary easing programme.
As the week drew to a close the Pound softened slightly as consumer confidence came in weaker-than-expected and as a report showed that the UK budget deficit swelled. Despite the negative news the Pound went on to make weekly gains against many of its most traded peers.
The coming week is expected to be quiet due to the Christmas holidays. Many traders and investors embarked on a bout of profit taking at the end of last week and early in today’s session before they head off for their holidays.
Key UK data for the week ahead:
There are no major UK data releases this week due to the festive season
Current Pound Sterling (GBP) Exchange Rates:
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6357
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1956
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.8310
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9953
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6113
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8362
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5460
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5010
(As of 10:00 am GMT)
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