As the European session opened the Pound was little changed against the US Dollar having gained on its North American peer overnight in response to hints of a debt-ceiling deal being announced later today.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.5988 as of 10:35 GMT.
While Sterling has rallied by 2.7 per cent over the last three months, the British currency has come under pressure in recent weeks as a series of pieces of UK data (such as last week’s industrial/manufacturing production reports) failed to match up with estimates and investors speculated that the currency’s rally had been overdone.
However, the Pound advanced on the ‘Greenback’ this morning despite the UK consumer price index increasing by more-than-expected in September, climbing 0.4 per cent month-on-month rather than the 0.3 per cent forecast.
Year-on-year consumer prices climbed by 2.7 per cent, unchanged from August, stronger than economists’ 2.6 per cent estimate and considerably above the Bank of England’s target.
Core inflation jumped from 2 per cent in August to 2.2 per cent last month.
1 US Dollar is currently worth 0.6258 pence
While Sterling was slightly stronger after the data was published, economist James Knightly stated; ‘The main risk is utility bills, which could rise sharply in coming months and keep inflation remaining well above the 2 per cent central target. We continue to look for an early 2015 rate hike with Sterling remaining under upside pressure.’
Meanwhile, a separate Office for National Statistics report showed accelerating UK house prices in August, with the largest annual increase in home prices since October 2010. The index hit a record high 185.5 in August.
Although this result could contribute to fears that the UK is in a housing bubble, yesterday Jon Cunliffe (future Bank of England Deputy Governor for Financial Stability) stated; ‘The picture emerging is that prices are starting to rise, but we’re still coming back from a relatively low base. And of course it’s a patchy picture because there’s quite a dispersion across the country’.
While Sterling consolidated gains against the ‘Greenback’ as the European session progressed, the British asset weakened against the Euro as ZEW economic sentiment surveys for both Germany and the Eurozone increased by more-than-anticipated.
If a US debt ceiling deal is announced during the North American trading the GBP/USD pairing is likely to experience additional fluctuations, although investors will also be looking ahead to tomorrow’s influential UK employment data.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5988 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1801 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6763 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9032 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6258 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8475 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5965 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5254 >
(As of 10:35 GMT)
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