The best British pound to dollar exchange rate (GBP/USD) of 2014 was achieved on the 6th of May when we saw the pair beiefly touch 1.6996. A push through and above 1.700 resistance level proved a step too far for markets and traders subsequently gave up on the rally.
The pound to euro exchange rate (GBP/EUR) is forecasted to take us to the best levels of 2014 provided momentum stays unchanged. However, trade at the start of the new week favours the euro as a downside correction shapes up.
Further losses are being seen on Wednesday as signs suggest the UK housing market is starting to cool. UK BBA mortgage approvals were weaker than expected, slipping to 42,173 in April from 45k previously. The softer number likely reflects the introduction of the Mortgage Market Review in April. If the housing market cools there will be less pressure for the Bank of England to raise rates, and this will be unhelpful to sterling bulls.
Above: The BoE Governor has ensured the best levels seen in the sterling euro exchange rate in 5 months slipped away on Wednesday.
After a torrid Wednesday, those looking to buy euros with their pound sterling (GBP) are seeing relief set in as lost levels are recaptured. The recovery could event take in the best exchange rate levels of 2014.
The pound to euro hit a high of 1.2364 yesterday, the best exchange rate in over a year, but we are seeing the expected reversal in the currency pair take shape. As we all well aware, nothing travels in a straight line, particularly with regards to currencies!