British Pound (GBP) Exchange Rate: Bullish Sterling Hits Four-Year High against US Dollar
Last week’s Bank of England inflation report improved the UK’s economic outlook and increased the appeal of the nation’s currency.
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In the report the central bank positively revised the UK’s growth forecasts and intimated that interest rates could be increased next year.
The Pound consequently strengthened against the majority of its most traded peers and ended the week on a high against rivals like the Euro and US Dollar.
Although US markets being closed for a national holiday is likely to restrain trading today, the Pound was still able to strengthen to a four-year high against the ‘Greenback’.
Sterling was boosted by the news that UK house prices jumped in February.
Following a 1 per cent month-on-month increase in UK home values in January, prices climbed by 3.3 per cent this month.
The Rightmove report showed that house prices were up 6.9 per cent on the year.
According to Rightmove Director Miles Shipside; ‘New sellers are now asking over 16,000 pounds more than those who came to market a year ago, a rate of increase not seen since before the credit crunch took hold in 2008. […] Supply and demand imbalances remain and are getting worse in many markets, as a result of years of under-provision of additional housing stock, especially in the areas where the local economy and employment are strong’.
Although some investors have expressed concern regarding the prospect of a UK housing bubble, today’s data still helped the Pound advance.
Tomorrow considerable Sterling movement could be inspired by the release of UK inflation data.
The UK’s consumer price index is expected to show a 2.0 per cent year-on-year advance in January, following a month-on-month decline of 0.5 per cent.
As the week progresses UK employment data and retail sales figures are also likely to have a notable impact on the Pound’s exchange rate.
After hitting a four-year high of 1.6823 the Pound is currently trading against the US Dollar in the region of 1.6740 and trading against the Euro in the region of 1.2216.