Pound To Dollar Exchange Rate Gains On Posive Global Data

Modified: Tuesday, 6 March 2012 08:43 BST - Written by John Cameron

STORY LINK Pound To Dollar Exchange Rate Gains On Posive Global Data

The Pound to US Dollar exchange rate is 1.5826, while the Pound to Australian Dollar exchange rate is 1.4907.

In spite of worrying developments from China and the US at the start of this week’s session, the US Dollar failed to make up any significant ground against Sterling over the 48 hours since the market re-opened.

The downgrading of China’s GDP growth target to 7.5%, its lowest level for eight years, along with dark comments from President Obama, which threatened the use of force against Iran, should by rights have caused a surge of safe haven support for the Greenback. In the event, however, the GBP USD exchange rate gained on the day to touch an intraday high of 1.5877.

The GBP USD rate rejected an initial move lower as investors reacted to some encouraging global data releases. These included whole-of-eurozone Retail Sales numbers for January, which thrashed expectations of a 1.5% drop from December’s figure to print at 0.0%. The relatively strong European shop sales figures were re-enforced by a strong print for the US ISM Non-Manufacturing Composite survey, which showed that America’s key services sector is expanding at its fastest rate since February 2011.

The highlight of today’s session comes in the form of this morning’s whole-of-eurozone GDP Growth figures for Q4 2011. Expectations for the number are low, with analysts anticipating that the data will reveal a contraction of 0.3% in economic activity in the single economic area in the last three months of 2011. Anything north of this would likely see the euro supported in the lead-up to Thursday’s European Central Bank policy announcement. Such a scenario could see the GBP EUR exchange rate consolidate above the key 1.2000 level, with the 18-month high of 1.2163 providing a medium-term target.

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