UK pound is pausing today, looking for consolidation at the end of this week after solid gains driven by encouraging economic data. More strength is expected for the sterling going forward, especially against the euro, thanks to the improving economic picture. So while the pound is lower today, it is likely to strengthen in coming weeks.
Sterling has been doing pretty well this year, including a rally performance earlier in the week. Good news about employment and inflation continues to spur expectations that the Bank of England will raise interest rates sooner rather than later, as well as reduce asset purchases. However, the news that the BOE will wait until 2015 is weighing a bit.
However, there are still some concerns for Forex traders regarding the UK pound. Worries that wage growth in the United Kingdom isn’t keeping up with other economic indicators is putting a damper on some of the expected gains for sterling. Today, though, the down performance is more about profit taking and consolidation after gains earlier this week.
UK pound is still considered to have solid footing, and many expect the currency to begin a new rally as the year moves into its second half.
At 13:42 GMT EUR/GBP is up to 0.7917 from the open at 0.7910. GBP/USD is down to 1.7054 from the open at 1.7101. GBP/JPY is also lower, dropping to 172.9285 from the open at 173.0250.
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