British Pound (GBP) Exchange Rate Stronger Following Positive GDP Figures; Awaiting US Data
The British Pound (GBP) is currently trading at 1.6988 against the US Dollar (USD), ranging to highs of 1.6988 so far this session; conversely the Pound to Euro (EUR) exchange rate is trending at 1.2626.
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Friday has seen the first Pound rise versus the Euro in three days, following the release of influential UK Gross Domestic Product (GDP) data that showed a rise of 0.8% in the second quarter. Friday’s release has shown the UK economic expansion to be greater than pre-crisis levels.
Chancellor George Osborne stated: ‘Today the IMF (International Monetary Fund) has upgraded their 2014 forecast for the UK by more than any other major economy. The government’s long-term economic plan is working. But the job is not yet done and so we will go on making the assessment of what needs to be done to secure a brighter economic future.’
Despite showing optimism for the economic expansion in the UK, wages have failed to grow recently as forecast. Director of the IMF Olivier Blanchard stated: ‘The recovery continues, but it remains a weak recovery.’
Furthermore a spokesperson for TUC, Frances O’Grady commented on the recent wage disappointment: ‘Pay packets are still falling behind rising prices, so most people are not yet sharing in the recovery. If the good news on growth is going to last, real wages must start improving too. Businesses can only grow if customers have more money in their pockets, which means that Britain needs a pay rise.’
However, despite an optimistic start to the day on Friday, the UK housing market has fallen flat, showing the increase in house prices growing lethargic, slowing to its most sluggish pace in 18 months.
Hometrack spokesperson Richard Donnell commented: ‘Seasonal factors always lead to a slowdown in demand and market activity in the summer months, but it is clear that there are bigger forces at work with a pronounced loss of momentum in the London housing market in the last three months.’
With no further data releases scheduled this week, the Pound will be reliant on the effect of the US Durable Goods Orders figures to encourage any further movement in the Pound to US Dollar exchange rate.
The USD/GBP exchange rate is presently trading at 0.5890.