With this week’s UK data surprising to the upside the Pound has enjoyed a bullish few days. Before the Bank of England delivered its rate decision the British currency was trading beyond a three-month high against the Euro, having gained on its European cousin for seven consecutive days.
Against the US Dollar Sterling was little changed.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1818 as of 12:35 GMT
1 Euro is currently worth 0.8460 pence
As economists forecast the BoE opted to hold its key interest rate at record lows, in keeping with the forward guidance supplied by the central bank last month which tied interest rates to unemployment.
In an unprecedented move, after the August meeting the BoE implied that rate increases would only be considered once the employment rate falls below 7 per cent, and as of last month UK unemployment stands at 7.8 per cent.
Today the benchmark rate stayed at 0.5 per cent while the Monetary Policy Committee’s asset purchase program was left unaltered.
The GBP/EUR exchange rate hit a high of 1.1875
This week’s strong manufacturing, construction and services PMI figures for the Eurozone all indicate that the UK could be poised to record better growth in the third quarter than the 0.7 per cent expansion recorded in the second.
Economist Alan Clarke said of the BoE stance; ‘We’ve been waiting for growth numbers like this for years and we don’t want to see it choked off. It’s a marathon, not a sprint. Higher market rates are an irritation, not a game changer.’
After the BoE’s decision was announced the Pound advanced on the US Dollar, but movement against the Euro was limited ahead of today’s other big news, the European Central Bank’s rate decision.
Industry experts are forecasting that the ECB will also hold rates at current record lows and leave fiscal policy unadjusted. It is also believed that ECB President Mario Draghi may urge caution regarding the fragility of the Eurozone’s return to growth.
Tomorrow several factors are likely to dictate Pound movement, including UK manufacturing/industrial production figures and UK trade balance data.
Meanwhile, a German industrial production report will also impact the GBP/EUR pairing, while the US non-farm payrolls report will be largely responsible for additional GBP/USD movement before the weekend.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5624 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1818 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7091 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9802 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6395 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8460 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5853 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5031 <
(As of 12:35 GMT)
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