The GBP/USD exchange rate advanced on Thursday as UK retail sales data eased concerns over the health of the UK economy.
On Wednesday the Pound to US Dollar (GBP/USD) exchange rate rallied after the Bank of England minutes showed that less policy makers than expected voted in favour of leaving interest rates unchanged at 0.5%.
As the session progressed the currency pair settled into a tight range as investors turned their attention to the evenings Federal Reserve Policy meeting minutes.
The Pound to US Dollar (GBP/USD) exchange rate was little moved and hovering at a 14-month low and the currency pair is forecast to experience volatility as the market saw the release of inflation data from both the UK and USA.
US data released on Monday showed that manufacturing production rose by 0.2% in October, matching forecasts. Other data meanwhile came in below expectations.
Earlier in the session Sterling continued to experience a tumble as last week it declined to its lowest level in 14-months against the US Dollar after the Bank of England warned that inflation in the UK could fall below the 1% level over the next six months as the weakness of the Eurozone continues to drag upon the UK economy.Exchange
David Cameron told world leaders at the G-20 summit in Brisbane that the world economy remains in danger. He cited geopolitical concerns such as the standoff between the West and Russia and the conflict in the Middle East as key points that could destabilise the economy.
‘We cannot insulate ourselves completely. It is more important than ever that we send a clear message to the world that Britain is not going to waver on dealing with its debts. This stability is vital in attracting business and international investment that delivers growth and jobs, and which keeps long-term interest rates low,’ the Prime Minister said.
The comments over low interest rates were of particular interest to traders and as such kept the Pound lower against a number of major peers.
Over the weekend the Pound managed to ease away from the 14-month low recorded last week but it could once again slide to that level if the afternoons US economic data releases offer support to the ‘Greenback’.
UK inflation data released on Tuesday offered little in the way of support as economists were left unconvinced by the slight improvement. Most are forecasting for inflation to fall over the coming months and the small rise was considered a blip.
