Foreign Exchange Insight : GBP USD Rate Hits 15-Week High Despite Weak UK Employment Numbers and Dovish BoE Minutes
The Pound Euro exchange rate (GBP EUR) is 1.1471. The Pound Dollar exchange rate (GBP USD) is 1.6508. The Pound Australian Dollar exchange rate (GBP AUD) is 1.5740.
In an unusual session yesterday, the Pound made gains against the Euro and the US Dollar in spite of the release of the minute of August?s Bank of England monetary policy committee meeting, which showed that for the first time since May 2010 the committee had unanimously voted to keep interest rates on hold.
Analysts had anticipated that two members, Weale and Dale, had voted to raise rates, as had been the case in recent months. However these two long-time hawks opted to ditch their calls for a tightening of policy as the committee noted that, ?the slowing in world demand growth and the heightened tensions in financial markets meant that the balance of risks to the medium-term inflation outlook had clearly shifted to the downside?.
The minutes also showed that member Adam Posen had voted to increase the UK?s asset purchase scheme by �50bn and although he was once again a lone voice in calling for this action, the minutes suggested that the committee had serious discussions on whether to further ease UK monetary policy by extending quantitative easing. Analysts are agreed that any such action would place heavy selling pressure on Sterling.
With figures released yesterday morning showing an unexpected increase in the UK?s rate of unemployment from 7.7% to 7.9% in July, there were plenty of reasons for analysts to be downbeat regarding the prospects for Britain?s real economy.
However, the Pound defied gravity to trade up to 1.6591 against the US Dollar, its highest level since 3rd May. Sterling enjoyed similar gains against the Euro, with the GBP EUR rate climbing to 1.1494 on the day, to leave investors scratching their heads.
Several analysts have pointed to an aggressive buying-up of Sterling by a market-maker in order to fund merger and acquisition activities for a client as the reason behind the Pound?s rally yesterday. If this is the case, then Sterling?s gains are likely to be short-lived and given yesterday?s releases, the GBP USD and GBP EUR rates could re-trace during today?s session, particularly if this morning?s UK Retail Sales Figures for July disappoint.
For other live currency exchange rates and a currency converter see the currency news website.
TAGS: American Dollar Forecasts Daily Currency Updates Euro Forecasts Pound Dollar Forecasts Pound Euro Forecasts Pound Sterling Forecasts
Source: http://www.currencynews.co.uk/forecast/20110818-686_forex-report-gbp-gains.html
Free Forex Signal Forex Trading Signals Forex Strategies Forex Trading Strategies Currency Trading
No comments:
Post a Comment