Pound to Euro (GBP EUR) & Pound to Dollar (GBP USD) Exchange Rates Hit Top Of Their Recent Range

Modified: Thursday, 19 September 2013 09:25 BST - Written by John Cameron

STORY LINK Pound to Euro (GBP EUR) & Pound to Dollar (GBP USD) Exchange Rates Hit Top Of Their Recent Range

The Pound Sterling posted good gains across the board yesterday, sending Pound to Euro (GBP EUR) and Pound to Dollar (GBP USD) to range-topping rates. However, new subsidies in China raised fears of a trade war between the Asian giant and the USA.

The Pound to Euro exchange rate (GBP/EUR) is currently trading down by 0.18% at 1.1942 GBP/EUR. The Euro to Pound exchange rate is currently trading at 0.8374 EUR/GBP.

Sterling enjoyed a positive session in the global currency markets yesterday, with the Pound euro exchange rate climbing to as high as 1.1969 and the Pound US Dollar exchange rate (GBP/USD) reaching 1.5980 during the middle part of the North American trading day.

The positive performance from the Pound was driven by the go-ahead tone of the latest set of Bank of England minutes, published at 0930hrs BST yesterday. The memos of the BoE policy committee’s September meeting revealed that the UK’s policymakers expect the British recovery to pick up pace during the third quarter of 2013, with economic activity set to increase by 0.7% during the three months to the end of September. This prediction marked a sizeable upward revision from the UK central bank’s previous forecast of 0.5% growth during Q3.

The Bank pointed to leading indicators, including the best Purchasing manager Index survey for some six years, released last month, as evidence that UK Plc is firmly on the path to recovery following the pronounced dip in growth which the 2007/08 credit crisis triggered.

Elsewhere, news from China during yesterday’s session emphasised that policymakers in Asia’s premier economy remain determined to maintain their nation’s position as ‘the workshop of the world’. With many analysts in the oil sector stating that we have already reached ‘peak oil’ and that levels of extraction of ‘black gold’ are set to steadily decline in coming years, China is looking to the future by providing subsidies for electric cars.

While the development may prove good news for the environment and for China’s electric car manufacturers, it may not be such a positive for international free trade. Historically, the US has been wary of any subsidies provided by China’s government to the nation’s industries, so yesterday’s news will not have played well in Washington. Any suggestion of a tit-for-tat trade war between China and the US would be likely to see appetite for risk drain from the markets, triggering strong support for the safe-haven US Dollar and sending GBP USD sharply lower.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Daily Currency Updates Dollar Po Forecasts