British Pound (GBP) Latest: Sterling Exchange Rate Complex Stable

Pound to euro (GBP EUR):

1.1974

Pound to US dollar (GBP USD):

1.256

Pound to Aus Dollar (GBP AUD):

1.9433

Pound to Canadian Dollar (GBP CAD):

1.7689

Pound to New Zealand Dollar (GBP NZD):

2.157

Pound to South African Rand (GBP ZAR):

22.8541

Please note: The above quotes are taken from the inter-bank markets; all retail rates offered by your bank attract a discretionary spread. However, an independent FX provider is able to undercut your bank's offer, thereby delivering up to 5% more currency. Please learn more here.

RBS have today reiterated their pound euro exchange rate forecast for 1.24 by the end of 2014.

Q3 will see the rate at 1.23, and the second quarter rate should be at 1.22.

The Q4 GBP-USD rate will be at 1.60, the Q3 level is predicted at 1.62 while Q2 is 1.65.

"Sterling traders had little specifically to look at, as the UK calendar was empty. The euro tried to build out yesterday’s post‐ECB rally, but a LT down trend line was enough to keep EUR/GBP gaining more. So, the whole trading occurred between 0.8275 and 0.8301. A session to forget fast. Cable mirrored the moves of EUR/USD, testing the upside in the morning session, but was set back after the US payrolls report and the rise in US yields. It now changes hands near opening levels." - Piet Lammens at KBC Markets.

The CBI has responded to a speech by Danny Alexander, Chief Secretary to the Treasury, on Scottish independence to the National Association of Pension Funds (NAPF) conference.

Katja Hall, CBI Chief Policy Director, said:

"The UK Government and the main political parties have made it clear that keeping the pound after independence would not be an option.

"The Scottish Government must outline its Plan B for the currency so that businesses and consumers are fully aware of the implications of independence. At the moment they simply don't know what money they will have in their pockets. And there will be major implications for people's pensions.

"As an independent Scotland would also have separate regulations, business costs would almost certainly increase, which is why many Scottish businesses are starting to express their concerns publicly."

This seems to be a theme (see 12:29):

"The pound, which remains near multi-year highs against the dollar, may struggle to add to recent gains with much of the positive outlook for the U.K. economy already largely priced into sterling’s valuation. Going forward, the pound will likely need some very positive news to push higher," says Omer Esiner at Commonwealth Foreign Exchange.

The GBP/CAD has rocketed to record gains of 0.9 pct and reach 1.8554.

The CAD has been hammered after the Net Change in Employment (Feb) figure registered -7K, analysts had expected the Canadian economy to register 15K jobs.

We put this graph out yesterday - the rate has bounced perfectly off the bottom trend line. This keeps the bullish GBP-CAD scenario in play.

US Nonfarm Payrolls came in at 175K to beat expectations (149K) in February. Little impact to markets though.

Analysts at UniCredit Bank are positive on sterling, however they note the currency requires incredibly strong data readings ahead of a push higher:

"The recently released UK 4Q GDP figures included strong business investment and, thus, provided the growth picture with an improved degree of sustainability. For that reason, we remain very constructive on sterling as we have comprehensively outlined in our last edition.

"However, though latest data releases were again strong, markets reacted sensitively to any shortfall compared to expectations. Hence, it seems that even stronger data readings are required to accelerate the upward momentum in cable in the short term, which us unlikely to be provided by next week’s UK industrial production data. Hence, cable should hover around current levels, while EUR-GBP is likely to trade between 0.8200 and 0.8250 again."

The big event for the US dollar today regards the release of the Non-Farm Payroll data at 13:30 GMT:

Kathy Lien at BK Asset Management says the Fed needs a good reading today:

"The Federal Reserve needs the non-farm payrolls report to show a minimum job growth of 115k otherwise their credibility and the validity of taper will come into question. Based on this morning's comments from Fed President Dudley who is also a voting member of the FOMC this year, the "threshold is pretty high" to change the course of tapering. Similar comments from Janet Yellen last month indicates that she agrees a material change needs to occur in the economic outlook for the Fed to pause tapering. So barring a sub 100k print, the Fed will continue to taper when they meet later this month."

"EURGBP trades a leg up, the bullish momentum strengthens. The pair tests the Jul’12-Mar’13 downtrend channel top (at 0.82900 today) on the upside. A breach above this level will shift EURGBP in bullish consolidation zone. Decent option bids with today expiry are placed at 0.82500." - Ipek Ozkardeskaya at Swissquote Bank.

Where will the euro pause? It is currently at 0.8290 having broken an earlier resistance level. Where next? This from Swissquote Research:

"EUR/GBP is challenging the high of its short-term horizontal range defined by the support at 0.8191 and the resistance at 0.8267. A key resistance is given by the long-term declining trendline (around 0.8313). An initial support lies at 0.8263 (intraday low).

"In the longer term, the technical structure remains negative as long as prices remain below the resistance at 0.8350 (13/01/2014 high). Monitor the support implied by the 61.8% retracement (of the 2012-2013 rise) at 0.8160. Another key support can be found at 0.8082 (01/01/2013 low)."

It's all about the 'risk' currencies today (we refer to EUR, AUD, NZD, ZAR):

"Risk currencies remained well bid ahead of the US Nonfarm Payrolls report with EUR/USD hitting multi-year highs as traders were clearly primed for a lackluster report. The EUR/USD rose to a high of 1.3882 in morning London dealing, hitting its best levels since 2011. The pair has been driven higher by a relatively hawkish ECB presser yesterday at which Mario Draghi offered no new stimulus measures for the region." - Boris Schlossberg at BK Asset Management.

The below graph is telling in that it explains where we can expect to see the GBP-EUR exchange rate in coming weeks. The rate is well contained between 1.20 at the bottom and 1.22 at the top.

Luc Luyet at MIG Bank has presented his latest technical predictions for the GBP-USD:

"GBP/USD is still viewed in a consolidation phase after its sharp rise from the low at 1.6252. Hourly supports now are at 1.6686 (see also the rising channel) and 1.6641, while a key support stands at 1.6584. The hourly resistance at 1.6769 has held thus far. Another resistance lies at 1.6823.

"In the longer term, the technical structure favours a bullish bias as long as the support at 1.6220 (17/12/2013 low) holds. The decisive break of the resistance at 1.6668 opens the way for a move towards the major resistance at 1.7043 (05/08/2009 high). However, a sustainable move above that level is unlikely in the next few weeks."

At present all drivers to the UK unit are external with little force being exerted by the Bank of England. This is a good thing says Kathy Lien at BK Asset Management:

"The Bank of England left monetary policy unchanged. Unlike the ECB who delivers a post monetary policy meeting press conference, the U.K. central bank only releases a brief statement outlining their decision. The lack of details minimises the volatility for the currency, which is generally an ideal outcome for central banks."

The euro is one of the star performers of the week. EUR rallied across the board yesterday after the ECB made no changes to monetary policy.

While the firmer February CPI print last week did reduce the likelihood of further action at this meeting, some market participants still saw risks of a potential move by the ECB. Furthermore, Draghi’s tone at the meeting was not as dovish as the market had expected and in parts he was quite upbeat.

"With little on the domestic economic calendar, today's BoE/GfK quarterly inflation expectations may attract some interest. The latest survey will provide some indication over consumers’ interest rate expectations following the BoE's recent 'updated' forward guidance. However, we doubt this will trigger much market reaction. US data will likely be the main driver for GBP/USD." - Lloyds Bank Research.

Lloyds Bank confirm the view that the the pound sterling is unlikely to have any luck against the euro:

For EUR/GBP, we view the bias remains to the upside with EUR likely to remain well supported post-ECB. The 0.8300 level will likely be good initial resistance.

Yesterday saw heavy losses against the euro; it's more of the same today with the UK currency no well into the 1.20's. It wasn't that long ago that we were betting on a rise to 1.22!

Momentum is now behind the Euro and we would expect further declines, however a break below 1.20 would require something special.