Although the Pound has weakened against the Euro this morning as the common currency received a boost in the form of a stronger than anticipated German economic sentiment index, the British currency is trading close to an eight-month high against its US counterpart.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1893 as of 11:50 GMT.
In the immediate aftermath of the release of UK inflation data the Pound initially trimmed an earlier gain against the ‘Greenback’, despite the fact that the report showed UK inflation slowed to 2.7 per cent in August, year-on-year, from 2.8 per cent in July. Although still well above the Bank of England’s 2 per cent target, this is still improvement.
As noted by industry expert Neil Jones; ‘The data was in line with economist expectations, but the market has become accustomed to UK data outperforming. However, the Pound should still trade higher. Confidence in UK assets and companies continues to build and the economic and political backdrop is positive.’
Accordingly the Pound recouped some of its earlier losses against the US Dollar, but wasn’t quite able to reach earlier highs ahead of US inflation figures.
Sterling retained declines against the Euro as the common currency enjoyed a modest rally.
1 Euro is currently worth 0.8407 pence
However, with the minutes of the Bank of England’s recent policy meeting scheduled for release tomorrow the GBP/EUR pairing could well turn bullish once more.
Some economists are expecting the minutes to reflect the positive stance adopted by BoE Governor Mark Carney in last week’s testimony. If accurate, Sterling advances are likely.
As senior currency strategist Jane Foley comments; ‘There is a lot of optimism surrounding the UK recovery right now, and that’s the main driver for Sterling.’
Other UK news to watch out for this week includes domestic retail sales data, due for release on Thursday.
While the US Federal Open Market Committee decision regarding tapering quantitative easing will be the major cause of mid-week market volatility, if UK retail sales advance by 3.2 per cent in August year-on-year and beat expectations for month-on-month stagnation, the Pound could be headed for a third week of five-day gains against peers like the US Dollar and Euro.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5891 <
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1893 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7019 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9399 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6292 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8407 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5877 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5154 >
(As of 11:50 GMT)
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