Published: 23 Mar at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Cyprus, USA,
Yesterday the Pound strengthened against the majority of its peers, notably hitting a three-week high against the US Dollar, after UK retail sales data outstripped expectations.
Although economists forecast a gain in retail sales of just 0.5 per cent they actually increased by 2.1 per cent. The better-than-expected result caused industry experts to trim the odds of the Bank of England introducing additional stimulus methods over the next few months, allowing the Pound to climb.
Sterling later achieved a five-week high against the Euro as mounting uncertainty regarding the situation in Cyprus saw investors turning away from the common currency.
However, over the course of the day the Pound has moderately weakened against the Euro to trade in the region of 85.26 pence. Yesterday the pairing achieved a five-week high of 84.85 pence per Euro.
The European Central Bank gave Cyprus a tight deadline in which to raise the billions of Euros required for triggering emergency loans, but the increasing likelihood of resolution being achieved within the timeframe has allowed the Euro to gain modestly.
As currency analyst Eimear Daly notes: â€˜All the moves we are seeing in Pound/Euro are focused on Cyprus. Everyone is just waiting for any kind of headline to see if we are going to get some kind of resolution. Itâ€™s actually impressive how resilient the Euro has been.â€™
Meanwhile, the Pound has held relatively steady against the US Dollar to trade in the region of 1.5197 Dollars.
Next week investors will be focusing on key economic news from the UK as well as developments in the Eurozone. Final 4Q GDP figures for the UK are scheduled for release on Wednesday. If this data is stronger than originally estimated the Pound could strengthen further.
As of Saturday, 23rd March 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1725, GBP USD exchange rate was 1.523,