British Pound (GBP) Exchange Rate: Sterling Enjoys Strongest Gains for a Week
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While the common currency was boosted by encouraging Eurozone services, growth and retail sales data, speculation surrounding the prospect of European Central Bank intervention kept the Euro under pressure and helped Sterling advance.
The Pound was supported by the publication of UK services PMI.
Although the gauge edged down from 58.3 in January to 58.2 in February (the lowest reading since June of last year) the result was better than the 58.0 expected by economists and still significantly above the 50 mark separating contraction and growth.
The data indicate that the UK’s services sector continued to expand strongly as 2014 got underway.
When the gauges of UK manufacturing, construction and services are combined the composite index comes in at 58.6 for February, moderately below January’s 59.1.
The report also reveals the most rapid pace of hiring for 16 years.
Markit economist Chris Williamson presented a largely upbeat assessment of the UK’s economic outlook based on these figures.
Williamson stated; ‘The services economy notched up yet another month of robust growth in February, a performance that is all the more remarkable given the weather-related disruptions that have hit many businesses. […] Most encouraging of all is the record increase in job creation that the three PMI surveys collectively signalled in February. There’s no end in sight to the good news: with business confidence in the services economy rising further in February, growth should pick up again in March, adding conviction to the growing consensus that the economy is set for its best year of growth since 2007’.
Earlier in European trading the Pound was little affected as the British Retail Consortium’s shop price index declined by 1.4 per cent, year-on-year. Economists had expected a decline of 1.1 per cent.
Tomorrow’s Bank of England rate decision will be the major cause of Pound movement before the publication of the Bank of England’s 12 month inflation report on Friday.
The Pound is currently trading against the Euro in the region of 1.2161 and trading against the US Dollar in the region of 1.6688.