While the Pound was trading close to a 7 week-high against the Euro for much of the European session on Tuesday, Sterling was also holding its own against the US Dollar in spite of positive US news.
The Pound was putting in an impressive performance as investors looked back to last week’s impressive UK employment data and forward to next week’s UK growth figures.
If estimates for UK quarterly growth of 0.7 per cent prove accurate, Sterling could enjoy a bullish relationship with several of its major peers.
Speculation surrounding minutes from the most recent Bank of England policy meeting (due out tomorrow) also helped the Pound retain the upper hand.
However, as North American trading began some unexpectedly upbeat US data bolstered the ‘Greenback’ and helped it pare recent declines against rivals like the Yen, Euro and Australian Dollar.
Firstly, the US house price index advanced by 0.6 per cent in February, month-on-month, up from a gain of 0.4 per cent in January and more than the 0.5 per cent increase expected.
Then the Richmond Fed Manufacturing Index came in at 7 in April, a rebound from the -7 level recorded in March and trumping the estimate of 2.
Finally, existing home sales declined by far less than expected in March, dropping 0.2 per cent month-on-month rather than the 0.9 per cent expected. It was the third consecutive month of declining home sales, but the report was better than anticipated.
According to one UBS economist; ‘Sales are showing some lingering effects of the weather. It’s probably going to take a couple of months until you see a bounce.’
GBP to USD movement was a little restrained ahead of tomorrow’s more influential UK and US economic reports and the US Dollar continued trading in the region of 1.68 against the Pound.
Tomorrow’s BoE minutes, and US Markit manufacturing PMI will be the main causes of Pound to US Dollar movement.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5947,
US Dollar,,Canadian Dollar,1.1031, 
US Dollar,,Euro,0.7236,
US Dollar,,Australian Dollar,1.0680,
US Dollar,,New Zealand Dollar,1.1650 ,
Canadian Dollar,,US Dollar ,0.9094,
Pound Sterling,,US Dollar,1.6816,
Euro,,US Dollar,1.3791,
Australian Dollar,,US Dollar,0.9361,
New Zealand Dollar,,US Dollar,0.8599 ,
[/table]
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