After slumping to a fresh 1 ½ month low against the US Dollar on Friday, on the strength of positive US news and stimulus speculation, the Pound was able to gain modestly against its American peer this morning.
The Pound Sterling Exchange Rate was in the region of 1.5206 against the US Dollar as of 10:45 GMT
Sterling advanced on the US Dollar but was little changed against the Euro following the publication of a report showing that UK home prices rose for a fifth month.
According to Rightmove Plc the 2.1 per cent increase in May took average home prices to £249,841, a multi-year record, with asking prices in London climbing to a record £509,870.
In response to the result Miles Shipside, Director of Rightmove, remarked: ‘The pressure cooker of the London property market has been building up a head of steam every month since the beginning of the year. For those with money, many options to borrow and remain open in spite of the credit crunch, and this is helping fuel the London price boom.’
However, Shipside did go on to note: ‘Despite a new national record, it’s not green shoots of recovery across the board, especially for the deposit-strapped mass market.’
However, Sterling gains against the US Dollar were limited as the ‘Greenback’ continues to garner support from the expectation that the Federal Reserve may begin to scale down its easing measures if signs of US economic recovery continue.
In the days ahead several key pieces of data will cause Pound movement.
Tomorrow, for example, sees the publication of UK producer and consumer price indexes.
Industry experts have predicted that the report will show that the pace of consumer price increases slowed in April, dropping from 2.8 per cent in March to an annual inflation rate of 2.6 per cent last month.
Then on Wednesday the Bank of England will release the minutes of its latest policy meeting, while data concerning UK public sector net borrowing and industrial order expectations will also be published.
The main domestic catalyst for Pound movement on Thursday is likely to be UK retail sales figures and a report focusing on business investment, as well as revised growth data.
On Friday UK mortgage approval statistics could cause Sterling fluctuations.
Meanwhile, over in the US minutes from the Federal Reserve’s recent policy meeting, Fed Chairman Ben Bernanke’s testimony regarding monetary policy and US jobless claims/new home sales data will also be responsible for impacting the GBP/USD exchange rate.
Any additional signs that the US economy is recovering sufficiently to let up on easing could cause the US Dollar to broadly strengthen.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5206 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1808 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.5538 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.8694 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6582 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8469 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6437 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5351 >
(As of 10:45 GMT)
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