While not all of the UK data published last week was positive, the Pound was supported against the majority of its most traded peers as officials from the Bank of England issued positive comments regarding the UK’s economic recovery.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.6095 as of 12:35 GMT
A report released on Thursday may have shown an unexpected decline in UK retail sales, but BoE Governor Mark Carney stressed that the UK’s economic recovery is ‘one of the strongest […] in the advanced world.’
BoE policy maker Martin Weale also asserted that the central bank couldn’t ignore rising inflation forecasts and may have to reign in fiscal policy sooner than forecast.
Weale was quoted as saying; ‘We cannot risk a situation where people say we are deliberately looking the other way if the data show a significant change in inflation expectations. […] I would regard a movement of 0.5 per cent in such an indicator as extremely important. Indeed, I would be very concerned by a movement as large as 0.25 per cent in expectations. […] Even with inflation close to target, it is unlikely to be appropriate for rates to remain at their current level until all spare capacity in the economy has been used up.’
1 US Dollar is currently worth 0.6213 pence
This morning the Pound was little affected by a report showing a decline in UK house prices. The Rightmove report showed that property prices slipped by 2.4 per cent in November, month-on-month, after advancing by 2.8 per cent in October.
House prices were still up 4.0 per cent on the year.
UK news might be a little lacking for the first half of the week, but foreign-exchange strategist Paul Robson said this of the Pound’s likely movement in the days ahead; ‘This week we get the BoE minutes and we think the Monetary Policy Committee has converged on a fairly neutral policy setting. The market will be watching to see if there’s any disagreement in the minutes. We think the Pound can do better against the Euro.’
Key UK data for the week ahead –
Wednesday: Publication of Bank of England minutes
Thursday: UK Public Finances
Current Pound Sterling (GBP) Exchange Rates:
< Down > Up
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6095 <
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1917 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.7127 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9228 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6213 >
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8392 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5835 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5197 >
(As of 12:35 GMT)