The International Monetary Fund issued its growth forecast for a number of nations. The report indicated that the U.K. will sustain the highest level of economic expansion this year among several countries, causing the British Pound to surge.
Sterling Trades High Versus Euro
The British Pound benefitted from outstanding growth forecasts issued by the International Monetary Fund published in its World Economic Outlook Update. In the report, the IMF indicated that the U.K. will show more economic growth than any of the G-7 nations it assessed. The IMF stated that the U.K. will grow 2.4 percent in 2014 and 2.2 percent in the following year. The comments prompted the Sterling to rise to the highest price it has traded at in one year versus the Euro. The Sterling remained supported by speculations that today’s releases would indicate a decline in the unemployment rate. Wagers on a lower jobless rate caused the British monetary unit to rally versus the remainder of its peers, including the U.S. Dollar. And indeed, the news did not disappoint. The Office for National Statistics confirmed that the level of unemployment went down to 7.1 percent in the three months of September through November, very close to the Bank of England’s target for considering a hike in the benchmark interest rate. The British monetary unit extended gains after the Bank of England published the Minutes from its most recent policy meeting. These showed that the committee has taken notice of the economy’s improvement and decided not to increase the costs of borrowing money until the jobless rate reaches 7 percent.
Loonie Hits Four-Year Low
In other Forex news, Canada’s Dollar plummeted to a four-year low on the likelihood that the Federal Reserve may announce further cuts in the monthly bond purchasing program, while the Bank of Canada could implement additional stimulus. The Loonie dipped versus the majority of its counterparts in anticipation of today’s interest rate decision. The news will follow a bounty of lackluster economic data issued over the past month and investors believe the bank may opt for lowering the key cash rate.
The Australian Dollar rose the most in five days as government releases indicated that inflation advanced at a quicker pace than economists predicted, fueling speculation that the Reserve Bank won’t reduce the key cash rate. The inflation data took the Forex market by surprise, but it was welcomed as some analysts believe it will take the pressure off the central bank. According to the trimmed mean gauge, consumer prices in the South Pacific nation climbed 0.9 percent.