Following on from several weeks of positive UK news and Sterling strength, the Pound softened last week as the Bank of England left rates and the level of bond buying unchanged.
The Pound Sterling to Euro Exchange Rate was in the region of 1.1937 as of 10:50 GMT
Although economists were expecting the action, confirmation that the Bank of England doesn’t intend to begin tapering stimulus for the foreseeable future did cause a downward correction in the Pound and the currency slipped against the US Dollar and Euro as the week drew to a close.
1 Euro is currently worth 0.8378 pence
However, as European trading began on Monday the Pound recovered losses against the Euro.
BoE Governor Mark Carney is due to deliver a speech at The Economic Club of New York later today and any references he makes regarding the connection between the benchmark interest rate and UK unemployment could have a notable impact on the Pound.
The currency may also be affected by tomorrow’s manufacturing /industrial production reports.
The measure of industrial output is expected to have slowed from 0.9 per cent to 0.4 per cent in October while the level of manufacturing output dropped to 0.4 per cent from 1.2 per cent.
Separate figures are forecast to show a narrowing in the UK’s trade balance.
According to currency strategist Paul Robson; ‘The UK data we are going to get this week will inform on the missing links in the UK recovery. The Bank of England is staying very quiet on tightening monetary conditions, which is ultimately a green light for people to push Sterling higher, most notably against the Dollar.’
However, if the US data scheduled for release this week supports the case for the Federal Reserve tapering quantitative easing in December the ‘Greenback’ could limit GBP/USD gains.
Key UK data for the week ahead:
Tuesday: RICS House Price Balance
UK Industrial Production
UK Manufacturing Production
UK Total Trade Balance
NIESR Gross Domestic Product
Friday: UK Construction Output
Current Pound Sterling (GBP) Exchange Rates:
< Down > Up
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6376 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1937 >
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.8029 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9786 >
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6105 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8378 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5546 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5064 <
(As of 10:50 GMT)
