Exchange Rates: British Pound in timely boost

Last Updated on Thursday, 21 April 2011 09:04 Written by Will Peters Thursday, 21 April 2011 09:02

Retail sales come in ahead of expectations boosting the British Pound on the exchange rate markets.

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The pound dollar rate is 0.85% higher with 1 GBP = 1.6549 USD.

The pound euro rate is 0.07% higher with 1 GBP = 1.1310 EUR.

The pound Australian Dollar rate is 0.49% higher with 1 GBP = 1.5396 AUD.

"The British Pound received a timely boost this morning, after a report from the Office of National Statistics showed that UK retail sales unexpectedly rose in March," says a morning flash note from exchange rate analyst Adam Solomon at Tor FX.

Sales were up 0.2% from the previous month, despite initial forecasts of -0.5%, while the revised figure from the previous month was also higher. The report will add to optimism that the UK economy is gathering momentum, despite the budget cuts and widespread unemployment.

According to Solomon the focus for exchange rate markets now will fall squarely on the first quarter GDP data released on the 27th April and a strong return to growth in the first quarter, combined with high inflation, could inspire the Bank of England to raise interest rates before the third quarter.

"The Pound traded up through 1.65 against the Dollar to the highest level since November 2009 and Dollar buyers may wish to consider taking advantage of the current rate or at least place a stop order to protect against a renewed decline in Sterling," says Solomon.