Exchange Rates Today: Pound to Euro Rockets to 1.2022 GBP/EUR; Pound to Dollar Forecast Losses

March 27, 2014 - Written by Minesh Chaudhari

STORY LINK Exchange Rates Today: Pound to Euro Rockets to 1.2022 GBP/EUR; Pound to Dollar Forecast Losses

Yesterday’s European session brought a keynote announcement from the Bank of England which is likely to see the Pound Sterling (currency:GBP) well supported during coming months.

The UK central bank announced that it has agreed an accord with the People’s Bank of China which will allow the Chinese Yuan (or Renminbi as it is also known) to be traded through London exchanges. The memorandum of understanding, which will last for three years initially, will allow clearing and settlement of Yuan transactions in the British capital allowing London-based financial institutions to benefit from significant commissions and fees. With the agreement permitting a total of CNY200bn worth of swaps, the potential benefit to the UK economy is significant.

The Pound Sterling (currency:GBP) enjoyed a strong session on the global currency markets, partly in response to the news regarding the Sino-British deal. The UK tender climbed by over 0.50% by the middle part of the New York session against the euro, sending the Pound euro exchange rate up to an intraday high of 1.2022 GBP/EUR. The recent improvement for the single currency against Sterling now appears to have run its course.

Elsewhere, a strong showing from the latest set of US Durable Goods Orders data yesterday afternoon proved insufficient to trigger any further movement south for the Pound Dollar exchange rate, with the pair remaining at close to the 1.6600 GBP/USD level by close of business in New York. A showing of 2.2% versus the consensus expectation of 0.8% for the February number looked convincing, but was mitigated by a downward revision of the counterpart January figure to -1.3%.

The Buck gets another opportunity to push on against Sterling later today with the publication of a raft of US data including the weekly Initial Jobless Claims number and Q4 Gross Domestic Product figure for the American economy. Expect renewed gains from the Greenback if these statistics please.

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