British Pound (GBP) Exchange Rate Remains Stable; Retail Sales Figures Reach 10-Year High
The British Pound to US Dollar (GBP/USD) exchange rate is currently trading down at 1.7015. This session has seen Sterling reach highs of 1.7053, whilst stooping to lows of 1.7006. The Pound is presently trading at its weakest exchange rate against the ‘Buck’ in the latter five days.
If you're looking to make an international money transfer, we recommend TorFX.
The UK economy has seen an interesting start to Thursday with Retail Sales data failing to reach the forecast 3.9% in June, or match May’s 3.7%, instead published at 3.6% year on year.
However, despite not reaching predictions, retail sales have risen since the recession in 2009, gaining upbeat momentum in 2013.
Sales in the second quarter have risen by 1.6%, proving to be the strongest figures the UK has seen in ten years. This has led economists to feel optimistic about growth in the UK; economist at BNP Paribas bank, David Tinsley, stated: ‘This is much stronger than seen in the first quarter this year and is the strongest over the recovery so far.’
Thursday’s figures could place more pressure on the Governor of the Bank of England, Mark Carney, to raise interest rates in the UK in the near future.
Despite Carney’s approach to interest rates proving ambiguous at best, he has stated that any increase will be ‘gradual and limited’ for fears of the rate hikes ability to ‘tip the economy’ into a recession.
Carney commented: ‘As the economy normalises, the Bank Rate will need to rise in order to achieve the inflation target. The Monetary Policy Committee (MPC) is supporting investment through clear guidance that it expects increases in the Bank Rate, once they begin, to be gradual and limited.’
With the BoE meeting minutes released this week, the vote remained unanimous that interest rates should remain low in the UK, disappointing those who feel the UK economy could withstand a rate hike.
Furthermore Carney continued: ‘This is in part because the headwinds facing the economy are likely to take some time to die down. These headwinds include public balance sheet repair, a highly indebted private sector as well as the drag from a 12% appreciation of Sterling over the past year.’
For now the USD to GBP exchange rate remains relatively stable trading at 0.5877, however, with the release of US Initial Jobless Claims and Continuing Claims figures this afternoon, the currency pairing may fluctuate.