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Best Money Transfers From UK as The Pound Sterling Exchange Rate Soars

Published: 23 Jan at 3 PM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Australian Dollar Exchange Rate, Forex, Canadian Dollar Exchange Rate, Euro Crisis, Rand Exchange Rate, UK, Economy, Inflation,

The pound soared yesterday after another strong raft of UK economic data was published. It is now trading at a 6 year high against the South African Rand; a 4 year high against the Australian and Canadian dollars and a 1 year high against the Euro.

The latest ‘shot in the arm’ for the pound came with the announcement from the Office for National Statistics (ONS) that the UK jobless rate fell more than had been expected by analysts from 7.4% to 7.1% in the three months to November, edging ever closer to the Bank of England’s 7% threshold at which it has said it will consider raising interest rates. Some analysts are now predicting a rate rise as soon as the second half of this year.

Unemployment fell by 167,000 to 2.32 million people in the three months ending November, marking the biggest drop since October 1997 and the second largest since records began in 1971 in the jobless figures.

In addition, the minutes of the last Bank of England (BoE) meeting from the beginning of the month showed a unanimous vote to keep UK interest rates at the record low of 0.5% and the Quantitative Easing (QE) budget unchanged at £375 billion despite the pick-up in the economy.

Howard Archer, Chief UK and European Economist at IHS Global Insight commented that "Consequently, consumers’ purchasing power is still being squeezed appreciably despite lower consumer price inflation – purchasing power needs to improve appreciably over time for sustainable decent consumer spending. While earnings growth seems likely to pick up over the coming months, the increase will most probably be gradual so it could well take to mid-2014 before earnings growth finally overtakes consumer price inflation."

Elsewhere, the Canadian dollar fell heavily after the Bank of Canada kept interest rates on hold at 1% but highlighted that inflation could be weaker than expected until 2016, indicating that there is little prospect of a rate rise in Canada before 2016.

It also said it could cut interest rates if the economy worsens.

The euro came under pressure yesterday afternoon after European Central Bank's (ECB) Executive Board member Benoit Coeure commented that the (ECB) will keep its interest rates at their current low levels for an extended period of time.

Overnight, the latest data from China disappointed with the publication of the HSBC Purchasing Managers’ Index (PMI) for China's manufacturing sector slipping from the 50.5 figure recorded in December 2013 to show a contraction in the sector with a figure of 49.6 recorded in January.

Hongbin Qu, Chief Economist China and Co-head of Asian Economic Research at HSBC commented that the main reason for the “marginal” contraction seen in the PMI was a cool-down in demand which in turn hit manufacturing.