Pound Sterling Exchange Rates: Sterling to Dollar (GBP/USD), Euro (GBP/EUR) & Japanese Yen (JPY) Forecasts

Modified: Tuesday, 24 June 2014 00:22 BST - Written by Minesh Chaudhari

STORY LINK Pound Sterling Exchange Rates: Sterling to Dollar (GBP/USD), Euro (GBP/EUR) & Japanese Yen (JPY) Forecasts

The Pound Sterling (GBP) began the week advancing above the $1.70 mark for the first time since 2009 against the US Dollar (USD) and strengthened against the majority of its most traded peers including the euro after comments made by Bank of England Deputy Governor Charlie Bean.

Over the weekend he suggested that he would welcome a rise in interest rates as it would indicate that the UK economy was returning to normal. The pound euro exchange rate was at its strongest level in 19-months.

Here we see today's exchange rates updated for Monday morning:

- The pound to dollar exchange rate is +0.01 per cent higher at 1.70222 GBP/USD.
- The euro to pound exchange rate is -0.08 per cent lower at 0.79786 EUR/GBP.
- The dollar to euro exchange rate is +0.07 per cent higher at 0.73631 USD/EUR.
- The dollar to pound exchange rate is -0.01 per cent lower at 0.58747 USD/GBP.

The US Dollar meanwhile started the weak down against the Japanese Yen as concerns increased over the conflict in Iraq.

Demand for safe haven currencies were bolstered by the situation which saw Sunni militants launch a lightening attack which brought its forces within 40 miles of Baghdad. Also aiding the Yen were concerns over Ukraine. Investors were also cautious ahead of the outcome of the Federal Reserve policy meeting which occurred on Wednesday.

Tuesday sees Pound Sterling exchange rate hold 5 year gains


On Tuesday the Pound was trading close to the previous sessions five-year high against the US Dollar and was holding its gains against the Euro as the currency continued to be supported by expectations that the Bank of England will raise interest sooner than investors expect. Wednesday also saw the release of the latest UK inflation data which caused some volatility for the currency as it came in below forecasts.

The US Dollar recovered some ground against the Euro and Japanese Yen after industrial and manufacturing production data came in better-than-expected. Despite the positive data the currency came under pressure after the International Monetary Fund cut its forecast for US economic growth for this year. The IMF said it now expects the U.S. economy to expand 2% in 2014, down from its forecast of 2.8% in April.

Midweek the Pound was still hovering just off of a five-year high against the US Dollar and was trading at a 20-month high against the Euro ahead of the publication of the minutes of its June 5th policy meeting. Economists were expecting the minutes to give a clearer indication that the Central Bank is getting closer to raising interest rates.

Dollar Yen rate supported by better than forecast US data

The US Dollar advanced to its best level in a week against the Japanese Yen after it was supported by better-than-expected US inflation data. The positive data raised expectations that the Federal Reserve will be more hawkish regarding an interest rate rise at tonight’s interest rate decision.

Both currencies then tumbled with the Pound dropping sharply against the Euro and other major peers after the minutes of the Bank of England’s June policy meeting were less hawkish than economists had been hoping.

The minutes reduced expectations that the BoE will raise interest rates before the end of the year.

GBP ends week on highs against USD and EUR

The US Dollar also fell and dropped to its lowest level so far this month against most of its major peers after the Federal Reserve signalled that it will leave interest rates unchanged at close to zero for the foreseeable future.

The Central Bank tapered its quantitative easing programme which also dampened demand for the currency.

As the week drew to a close the Pound continued to trade at a five-year high against the US Dollar on uncertainty over US interest rates and was higher against the Euro after the release of weaker than expected German PPI data.

Sterling also found some support from UK public sector borrowing data which came in positively.

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