2nd March 2011
Good morning. The pound gained again yesterday after better than expected housing data and higher inflation figures. After the usual snapshot of rates today, we'll have a detailed look at Sterling, Euro and US Dollar.
- GBP/EUR 1.1783
- GBP/USD 1.6228
- GBP/AUD 1.6062
- GBP/NZD 2.1930
- GBP/CAD 1.5848
- GBP/CHF 1.5050
- GBP/ZAR 11.302
- GBP/JPY 133.01
- GBP/HUF 321.09
- GBP/NOK 9.0823
- EUR/USD 1.3769
Better economic data has boosted the pound, mainly better house price data and higher than expected inflation figures, which continue to support the case for an interest rate hike in the UK. Comments from Bank of England policymakers that inflation will remain high this year had only a slight impact on the currency although it did keep speculation of a UK rate hike by mid-year intact. The data helped to maintain strong demand for the pound as signs of an improving economy add to speculation the country has recovered enough to withstand a rise in interest rates.
Against the Euro the pound has recovered much of the losses seen last week. The gains have mainly been Sterling based, due the better economic data outlined above. It's worth noting that the EU is also expected to raise interest rates this year, so any further gains vs the Euro may be limited. Indeed there is inflation data today from the EU that if high could further support this case.
We hit a 13 month high vs the US Dollar yesterday. Again this is partly due to the UK data, but also due to oil prices. The USA is a very large importer of oil, and so when prices rise it weakens the US Dollar making it more expensive to purchase. The ongoing problems in North Africa and the Middle east are causing oil prices to rise and this has pushed GBP/USD rates up.
UK data today is in the form of Halifax house prices which follows yesterdays report from the Nationwide. The EU also has various inflationary measures being released today. Further afield Australia has GDP figures showing how the economy is performing. The recent floods have weakened the AUD recently.
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Labels: Forecasts for Sterling and Euro