The latest set of UK Gross Domestic Product (GDP) were released this morning and whilst positive, fell in line with expectations. Our economy grew by 0.7% in quarter four of 2013, bringing our annual economic output to 1.9%. These were the details released by the Office for National Statistics (ONS), who confirmed it was the fastest annual rate of growth for the UK since 2007.
These figures only enhance the feeling that the UK economy is now truly on the road to recovery and the recent positive data releases, including excellent Retail Sales figures and falling unemployment, have helped to facilitate the Pound’s rise against the EUR, USD and AUD. Whilst this positive sentiment is likely to support the Pound moving forward, the Bank of England (BoE) have already aired their concerns that GBP is gaining too much market value. If this rise continues it could negatively affect our export industry, as goods and services become too expensive for our trade partners. Therefore any continued market support is likely to mean the BoE will step in and try to dampen expectations surrounding the UK economy in order to control the Pound’s rising value.
GBP/USD rates continue to be well supported around the 1.65 mark and although I expect the USD to move back below 1.60 this year, we find this move comes after new FED Governor takes her position up on February 1st. Once her policies have been outlined it will be easier to gain market support and once this happens I expect the USD to claw back some of the loses we saw during the last two quarters of 2013.
If you have an upcoming currency requirement and need to be kept up to date with all the latest market developments, or simply wish to compare our exchange rates with your current provider, then please feel free to contact me directly at [email protected]. Alternatively, you can contact one of our experienced brokers today on 0044 1494 787 478.