The Pound Sterling to Euro (GBP/EUR) exchange rate ticked higher by around 0.29% on Monday morning.
The Pound Sterling to US Dollar (GBP/USD) exchange rate edged lower by around -0.13%.
As traders await British data, the Pound edged higher versus may of its major rivals. This can be attributed to continued positive sentiment following comments from Bank of England (BoE) Governor Mark Carney, who stated that inflation would rise in line with a benchmark rate increase.
The Euro, meanwhile, is generally ticking lower versus many of its most traded currency competitors. This is as a result of speculation that the latest reform programme from Athens will be rejected by creditors.
The US Dollar, however, continues to strengthen versus the majority of its most traded rivals in response to hawkish comments from Federal Reserve Chair Janet Yellen, who intimated that a cash rate hike is on the cards.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3691.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4857.
Previously…
The Pound Sterling to Euro (GBP/EUR) exchange rate and Pound Sterling to US Dollar (GBP/USD) exchange rates strengthened on Friday after Bank of England (BoE) governor Mark Carney said that the central bank’s next interest rate move would be up.
The Pound Sterling to Euro (GBP/EUR) exchange rate hit a session high of 1.3760
Earlier in the session, the Pound had come under pressure after UK house price growth was shown to have increased by the smallest annual amount since September 2013. According to Nationwide, the annual rate of increase dropped from 5.7% to 5.1% in February, the seventh month in a row that price growth was shown to have slowed.
‘The recovery in Britain’s economy, including lower unemployment and record low interest rates, were supporting the housing market. Nevertheless, the pace of housing market activity has remained subdued, with the number of mortgages approved for house purchase in January around 20% below the level prevailing one year ago,’ said Robert Gardner, Nationwide’s chief economist.
The UK currency then strengthened after comments made by BoE policy makers.
Speaking at a Bundesbank conference in Frankfurt, Governor Carney said that the BoE is still on track to raise interest rates despite inflation being at the record low level of zero.
‘We’re still in a position where our message is… that the next move in interest rates is going to be up,’ Carney said at the conference.
Over the past week, Sterling had been weakened by dovish comments from BoE Chief Economist Andy Haldane, who said that interest rates could be cut if inflation stays subdued in Britain. The currency has also been weighed down by uncertainty ahead of parliamentary elections in May.
The Pound Sterling to US Dollar (GBP/USD) Exchange Rate touch a session high of 1.4887
Also supporting the Pound were comments made by Bank of England deputy governor Ben Broadbent.
Speaking at the Imperial College Business School in London, Broadbent said that the risk of a dangerous, protracted spell of UK deflation is low. Instead, he believes that UK inflation will begin to pick up again over the coming months and that interest rates will be raised and not cut.
‘Real interest rates still need to be low. Our inflation target is 2% not zero: what makes the current position ‘good’ is not low inflation per se but the fact that, in this particular instance, it’s been caused by something (a drop in oil prices) that improves real incomes. My own view, however, is that the likelihood of a broad and protracted deflation, afflicting wages as well as prices, is low,’ said Broadbent.
The Pound could soften against the US Dollar later in the session if the latest US GDP data comes in positively. Also of interest will be a speech by Federal Reserve Chairperson Janet Yellen.
