Foreign Exchange Rates: Pound to Euro Trades Down to 1.1912 GBP/EUR; Forecast Higher

Modified: Tuesday, 10 December 2013 21:08 BST - Written by Minesh Chaudhari

STORY LINK Foreign Exchange Rates: Pound to Euro Trades Down to 1.1912 GBP/EUR; Forecast Higher

The Bank of England Governor Mark Carney has been no stranger to controversy during his short stay at the Bank of England. The former Bank of Canada Governor took over the role of head honcho at the venerable Threadnedle Street institution as long ago as July and his tenure has been peppered with sweeping public statements. The latest of these came last night when Carney addressed the Economic Club of New York, warning (or perhaps advising) UK property market participants that this key sector of Britain’s economy is at risk of entering bubble territory – an outcome which the BoE Governor stated he was keen to avoid.

Further weight was added to Carney’s comments by the latest Royal Institute of Chartered Surveyors Survey, published in the early hours of this morning, which predicted that British property prices are set to surge at their fastest pace since 1999 during coming months. The markets appeared to view any such overheating of the UK property market as a destabilising influence on Britain’s tentative economic recovery and investors voted with their feet during today’s session. The Pound traded down against the euro on the day, sending the Pound euro exchange rate (GBP/EUR) to as low as 1.1912 on the session.

However, this afternoon’s trading has brought better news for the UK tender, with the publication of the November Gross Domestic Product Estimate for the UK economy from widely-respected think-tank the National Institute of Economic and Social Research. The figure, which takes a rolling quarterly snapshot of growth levels in the British economy, showed an increase from the counterpart October figure which printed at 0.7% to come out at 0.8%. The release suggests that the Pound may enjoy a better day against the euro and the other sixteen most-actively traded global currencies during tomorrow’s session. With a complete absence of tier one data releases from the UK to throw a spanner in the works, such an outcome would seem likely.

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