Pound Exchange Rates IGNORE Good GDP Data, GBP/EUR Flat, US Dollar Remains Strong

The FTSE 100 rose after the good news and is currently up 4.47 at 6,825.93, however the reaction in the sterling exchange rate complex has been decidedly less emphatic.

The pound has hardly reacted to the news largely because financial markets had forecast the GDP figure perfectly; surprises move the market.

• The pound to euro exchange rate is unchanged on Thursday's close at 1.2617 - well off the high of the week recorded at 1.2700 and could be set to consolidate yet further.
• The pound to dollar rate is slightly lower just below the key 1.7000 level.
• The pound to Canadian dollar is 0.07 pct higher at 1.8269
• The pound to Aus dollar is unchanged at 1.8044.

If you are looking to protect against further currency fluctuations or would like to automatically transact at a higher rate when reached, ensure your currency provider has the relevant stop and buy orders in place.

Best euro rates fall away

The best exchange rate for euro buyers holding pound sterling (GBP) have been missed by those holding out for higher rates.

The GBP/EUR is now firmly on the back-foot following on from the mid-week release of UK retail sales which disappointed.

"Disappointing UK retail sales have weighed on the GBP modestly and we think EURGBP risks rallying a little more near-term," says Shaun Osborne at TD Securities.  

UK retail sales data missed their mark printing at 0.1% versus 0.2% eyed with large declines in clothing affecting the headline number.

"Although the series is notoriously volatile and may have been impacted by the World Cup, the data on the consumption front shows that demand is far from overheating and therefore is yet another argument for BoE to remain accomodative for the time being," says Boris Schlossberg at BK Asset Management.

Forecasting the future direction of the euro pound (EUR/GBP) Ipek Ozkardeskaya at Swissquote Bank says:

"EUR/GBP recovered to 0.79236 post data. Trend and momentum indicators are marginally bullish after rebound from the year low of 0.78748 hit on July 23rd. Offers pre-21 dma (currently at 0.79416) should limit the rallies.

"More resistance is seen at June-July downtrend channel top (today at 0.79694). On the downside, decent option related offers sit at 0.78000 before the weekly closing bell."

Sterling hits 23 month high vs euro

The best euro exchange rate was on offer to sterling sellers earlier in the week when trade saw sterling hit a fresh 23-month high against the euro.

The high was hit prior to the release of the month's minutes from the Bank of England's Monetary Policy Committee who get together monthly to vote on changing the UK's base interest rate.

"After the release sterling ended up having a difficult day as it lost ground across the board as the minutes showed that policy makers were less eager to raise interest rates than anticipated. The minutes reflected concern that an early interest rate hike could impact the strength of the economic recovery in the UK," says Carl Hasty at Smart Currency Business.

 With Governor Carney also re-affirming his view that poor wage growth suggested more slack in the labour market than previously thought, sterling did not receive the positive boost that many economists had predicted.

Pound dollar rate in corrective phase

Elsewhere, the GBP/USD is in a corrective phase.

"The hourly support at 1.7039 has been breached. Other supports can be found at 1.7007 (see also the 38.2% retracement) and 1.6953. A break of the hourly resistance at 1.7118 (18/07/2014 high) is needed to improve the short-term technical structure. Another resistance stands at 1.7192," say Swissquote Research in a note to clients.

In the longer term, the break of the major resistance at 1.7043 (05/08/2009 high) calls for further strength say analysts, "resistances can be found at 1.7332 (see the 50% retracement of the 2008 decline) and 1.7447 (11/09/2008 low). A support lies at 1.6923 (18/06/2014 low)."