Before UK public finance figures were published the Pound was trading within touching distance of a two-month high against the US Dollar and was trading in a fairly narrow range against the Euro.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.5670 as of 10:30 GMT
1 US Dollar is currently worth 0.6379 pence
Although the data showed that the UK posted a surprise deficit last month as Government spending climbed, Sterling went on to rise close to a seven-week high against the Euro as investors turned their focus to the US and today’s all-important FOMC meeting minutes.
A measure of UK public borrowing revealed a deficit of 62 million pounds in July, down from a surplus of 823 million a year earlier.
Economists participating in a poll for Reuters News Agency forecast a surplus of 2.45 billion Pounds.
This was the UK’s first July deficit since 2010.
According to a statement from the Treasury; ‘Strong tax receipts in July confirm that the economy is moving from rescue to recovery. There is still a long way to go as the UK recovers from the biggest economic crisis in living memory, and the government is sticking to the economic plan.’
The GBP/USD exchange rate hit a high of 1.5646
While today’s report was slightly disappointing, Friday’s GDP report is forecast to show that the UK economy grew by 0.6 per cent in the second quarter, twice as much as it expanded in the first.
And in the opinion of foreign exchange strategist Josh O’Byrne, ‘The Pound could be fairly supported ahead of the Fed minutes. We suspect they’ll follow on from the more dovish tone set in the statement, highlighting higher mortgage rates and downside risks from low inflation.’
Sterling movement may be a little restrained as the European session progresses, but after the minutes are published at 19:00 GMT volatility can be expected to occur.
The GBP/EUR pairing is also likely to experience movement tomorrow as services/manufacturing PMI for the Eurozone and Germany is released. If the data meets or exceeds forecasts the Euro could recover lost ground against its British peer.
Current Pound Sterling (GBP) Exchange Rates:
< Down > Up
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5670 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1704 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7393 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9830 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6379 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8544 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5751 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5050 <
(As of 10:30 GMT)
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