The Pound Sterling (currency:GBP) continued to draw on support from the ability to hold support levels and the trend was subjected to sharp acceleration following the stronger-than-expected UK data. Industrial production increased by a stronger-than-expected 0.9% for February, after being unchanged the previous month, bolstering confidence in the short-term outlook.
The Pound Dollar exchange rate rallied sharply to an initial peak above 1.67 GBP/USD and the move was sustained by broad US Dollar weakness. The Pound Euro exchange rate also surged above 1.21 GBP/EUR, after the IMF upgraded the UK 2014 GDP forecast to 2.9%, from 2.4% with an expected rate of 2.5% for 2015.
This was the strongest forecast within the G7 countries, which provided underlying support for the Pound. To cap a very positive day for Sterling, the National Institute for Economic and Social Research reported a solid GDP estimate of 0.8% in the three months to March. The UK currency was able to hold firm and moved towards a one month high against the Euro beyond 1.2130. The Dollar remained generally on the defensive and selling pressure intensified during the day, after the greenback failed to take any further advantage from last week’s payrolls data and underlying optimism surrounding the U.S economic outlook.
In the Euro-zone, there was again speculation that the ECB appeared to be moving away from the possibility of near-term quantitative easing, which has helped to underpin demand for the Euro. Euro-zone officials in Italy and Belgium again tried to talk down the Euro, saying that a weaker currency would be preferable. The comments had minimal impact with markets waiting for any substantive central bank comments. The Dollar failed to gain any support and struggled close to the 1.38 level, as benchmark U.S yields remained lower with no significant change this morning.
Data Released 9th April 2014
U.K 09:30 Goods Trade Balance (February)
- Non EU
U.S 15:00 Wholesale Inventories (February)
U.S 19:0 FOMC Minutes from 18th – 19th Meeting
Key Pound Sterling / Euro Exchange Rates (As of: 10:00 GMT 09/04/2014)
The Pound Sterling to Australian Dollar exchange rate is trading down -0.41% at 1.78418 GBP/AUD.
The Pound Sterling to Euro exchange rate is trading down -0.09% at 1.21317 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading down -0.09% at 1.67335 GBP/USD.
The Euro to Australian Dollar exchange rate is trading down -0.32% at 1.47068 EUR/AUD.
The Euro to Pound Sterling exchange rate is trading up +0.09% at 0.82429 EUR/GBP.
The Euro to US Dollar exchange rate is trading up +0% at 1.37932 EUR/USD.