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British Pound Rises Against US Dollar on Positive Economic Data in the UK

January 4, 2017 at 21:08 by Yahia Barakah

Close-up of the UK pound noteThe British pound had some minor gains against the dollar on Wednesday, while remaining largely unchanged against the euro. The British currency benefited from fresh data that showed improving construction sector and higher consumer credit in the United Kingdom.

The Bank of England published its money and credit report for November 2016, which showed that consumer credit rose by a 10.8% annualized rate, or 1.9 billion pounds, during the month. Total consumer credit reached 192.2 billion pounds in November following the increase, which compares to an average monthly increase of 1.6 billion pounds during the previous six months.

Another report said that the Markit/CIPS UK construction purchasing managers’ index rose to 54.2 in December, the strongest increase in 9 months, compared to 52.8 in November. New orders had their best gain in 11 months, which helped the index recover from the soft patch it experienced earlier in 2016.

However, the positive data failed to trigger major gains for the British pound, as currency traders seemed to overlook the data releases. Their main focus was the release of the Federal Reserve’s minutes for its December meeting. The minutes showed that the central bank’s officials are no longer certain about the gradual pace of interest rates hikes. Instead, they might call for a faster pace that differs from the path of policy that is currently expected.

GBP/USD traded at 1.2318 as of 20:50 GMT on Wednesday, from 1.2332 at 19:10 GMT, the pair’s highest level in two days. GBP/USD opened trading today at 1.2236. EUR/GBP was at 0.8503, from 0.8531 at 15:30, the pair’s strongest point since December 30. EUR/GBP was unchanged from its level at the beginning of the day at 0.8503.

If you have any questions, comments, or opinions regarding the Great Britain Pound, feel free to post them using the commentary form below.

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