British Pound to US Dollar (GBP/USD) Exchange Rate Up after UK Manufacturing PMI
The British Pound may have edged lower against its peers following the release of slightly-disappointing UK growth figures, but the GBP/USD pairing recovered losses overnight.
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Sterling was able to advance on the US Dollar after US growth data showed annualised quarterly expansion of just 0.1 per cent and the Federal Open Market Committee stressed the necessity of keeping interest rates at record lows for the foreseeable future.
During European trading the Pound broadly strengthened after the release of economic reports for the UK.
Firstly, the Nationwide House Price survey showed a 1.2 per cent month-on-month increase in UK house prices in April, double the 0.6 per cent gain expected.
On the year house prices were up by a massive 10.9 per cent – the strongest annual gain since the global economic crisis began in 2007.
While this report could add to concerns that the recovery of Britain’s housing market is occurring too rapidly, former Bank of England official Spencer Dale recently asserted that, for the moment at least, the property sector isn’t in a price bubble.
Pound Sterling to US Dollar exchange rate consolidates gains
After UK manufacturing data was published the GBP/USD pairing consolidated gains. The Markit PMI advanced from a positively revised 55.8 in March to 57.3 in April. Economists had expected a reading of 55.4.
This result indicates that the UK’s strong economic performance continued as the second quarter began and supports the International Monetary Fund’s forecasts for annual UK growth of 2.9 per cent in 2014.
In a statement published with the figures, Markit economist Rob Dobson asserted; ‘UK manufacturing continued its surging start to 2014, with output growth accelerating in April to a level among the highest signalled over the past two decades.
‘This places the sector perfectly to build on the robust 1.3 per cent expansion in manufacturing production reported in the first estimate of Q1 GDP […] Output growth in the second quarter may even breach 1.5 per cent on its current track.’
However, with US manufacturing, jobless claims and personal spending figures all scheduled for publication over the next few hours, GBP/USD fluctuations are likely.
Before the weekend UK construction data will be of interest. The Markit construction gauge is expected to have edged down from 62.5 in March to 62.2 in April. However, if tomorrow’s report surprises to the upside the Pound could end the week on a high.
The British Pound is currently trading against the Euro in the region of 1.2169 and trading against the US Dollar in the region of 1.6908.