Pure FX Logo arrow Reviews On Feefo Pure FX Logo Exemplary Service In-Depth Knowledge We're Jargon Free Same-Day Transfers Better Exchange Rates No Commission 0 Personal Transfers Business Transfers FCA Authorized Personal Service Trusted Brokers Get A Quote Register With Us Make A Transfer Seller Transfers Contract Definitions Read Our Top Tips What Influences Exchange Rates Glossary Frequently Asked Questions Contact Us

Pound Jumps Versus US Dollar, as US Inflation Rises Below Forecasts

Image credit: Nimalan Tharmalingam.

by Peter Lavelle

Welcome to Pure FX’s weekly summary + outlook of the interbank exchange rates.

Pound to euro

Sterling holds steady versus the common currency! The pound to euro interbank exchange rate stuck close to 1.12 last week.

The pound held its ground last week, first because there were mixed reports about the Brexit talks. On the one hand, EU chief negotiator Michel Barnier said that talks were 'deadlocked', yet on the other, it's rumoured that Mr. Barnier will soon offer the UK a 2-year transition deal. Meanwhile, UK GDP rose +0.4% in Q3, according to NSIER, faster than Q2, yet below the pre-Brexit trend.

Meanwhile, the euro stood still last week, as the Eurozone economy continued to prosper, yet the European Central Bank (ECB) hinted that it will extend its massive stimulus. In particular, industrial production in the common currency bloc rose by +1.4% in August, a 9-month high. On the other hand though, it's thought that the ECB may extend QE well into 2018, albeit at lower volumes.


What's more, looking ahead, the pound could remain steady versus the euro. This is because, first, UK manufacturing production jumped +2.8% in August, far beyond predictions for +1.9%. This points to vibrant activity in the UK's factories. Yet, just as positively, Germany's exports exploded by +3.1% in August, thumping forecasts for a +1.0% rise. These figures could support the euro.

Pound to Swiss franc

The pound to Swiss franc interbank exchange rate gains! Sterling jumped +0.75 cents against the franc last week, to close to 1.2950.

The franc lost out last week, even though Switzerland's economy shone bright. To start with, Swiss unemployment fell -0.1% in September, to an amazingly low 3.1%. What's more, Swiss producer prices jumped +0.8% in September YoY, above forecasts for +0.6%. This suggests that the Swiss economy may at last be generating higher price pressures, which would lift the franc!

Pound to US dollar

Sterling packs a punch versus the greenback! The pound to US dollar interbank exchange rate jumped +1.5 cents last week, to around 1.33.

The US dollar slumped last week, chiefly because US inflation rose just +1.7% in September year-on-year, -0.1% below forecasts. This puts less pressure on the Federal Reserve to lift interest rates in December, above their current 1.00-1.25%. What's more, this low inflation may lift concerns at the Federal Reserve that weak pressures will be 'persistent', thus weighing on the buck.


That said though, looking ahead, the US dollar may rebound. This is because the US economy remains fighting fit. To start with, US retail sales jumped a mighty +1.6% last month, easily undoing August's -0.1% fall. What's more, US consumer confidence hit its highest since 2004 this month, said the University of Michigan, boding well for future GDP growth. So the buck may bounce back!

Pound to Australian dollar

The pound to Australian dollar interbank exchange rate slides! Sterling dipped -0.75 cents against the Aussie last week, to 1.6875.

The Australian dollar won out last week, first because inflation expectations Down Under jumped to +4.3% this month, from +3.8% in September. This tells us that Australians expect prices to rise faster, which points to buoyant economic growth, and may convince the Reserve Bank of Australia to lift interest rates sooner, above their current all-time low of 1.5%. Hence, the buoyant Aussie!


Moreover, the AU dollar could continue to gain, looking forward. This is because Australia's economy is powering full-steam ahead. For instance, Australian business confidence rose to +7 last month, according to National Australian Bank, above August's +5. What's more, Aussie consumer confidence jumped by +3.6% this month, said Westpac. This may lift the Australian dollar higher!

Pound to New Zealand dollar

Sterling does the high jump versus the kiwi dollar! The pound to New Zealand dollar interbank exchange rate rose +1 cent last week, to 1.86.

The NZ dollar struggled last week, first because New Zealand remains without a government, following its recent election. In particular, New Zealand First party leader Winston Peters said that he needs to consult his party's board, before deciding to work with National or Labour. Meanwhile, New Zealand electronic card sales rose just +0.1% in September, below predictions for +0.7%.

Pound to Canadian dollar

The pound to Canadian dollar interbank exchange rate reaches for the stars! Sterling rose +1.25 cents against the loonie, to close to 1.6625.

The CA dollar lost out last week, first because there are tensions over renegotiating the North America Free Trade Agreement (NAFTA) with the USA and Mexico. If the NAFTA talks falter, Canada's economy may slow. Also, the loonie dollar fell too, as the American Petroleum Institute said that there's a surprise build up in US oil inventories. This cut the price of oil, Canada's biggest export.


What's more, looking ahead, the loonie dollar could continue to sink. This is because, first, Canada's building permits unexpectedly sank -5.5% in August, far beyond forecasts for a -1.0% drop. This tells us that Canada's construction industry is currently on the back foot. In addition, Canada's new housing price index rose just +0.1% in August, below financial market forecasts for +0.3%.

Pound to South African rand

Sterling sinks versus the rand! The pound to South African rand interbank exchange rate declined -2.7% last week, to 17.65, a 1-month low.

The rand took charge last week, largely because South Africa's Supreme Court of Appeal ruled that President Jacob Zuma can face corruption charges. This lifts the odds that Mr. Zuma will lose power, while cutting support for his policies of 'radical economic transformation.' In addition, the rand also rose, as interest rates in South Africa remain at 10.25%, higher than most other nations.

Pound to Japanese yen

The pound to Japanese yen rises! Sterling rose +0.52% against the yen last week, to 148.86.

The yen sank last week, chiefly because the International Monetary Fund's (IMF's) GDP growth outlook for Japan was mixed. On the bright side, the IMF lifted its growth forecast for Japan in 2017 by +0.2%, to 1.5%. Yet less positively, the Fund said that Japan's GDP growth in future would be limited, by a shrinking work force, weak inflation, and higher imports. Hence, the weakening yen!

Get a free exchange rate quote

Get a free exchange rate quote to get our best exchange rate, and find out how much you could save with Pure FX.

You’ll get an exchange rate guaranteed to beat your high street bank.

Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email peter.lavelle@purefx.co.uk.

Get A Free Quote
I’d like to exchange...
Because I want to...
And I would like it...
Pure FX awarded Feefo Gold Trusted Merchant 2016PureFX's Product Rating on Feefo

What Our Clients Say

Read all the reviews at Feefo.com

Why Us

FCA Authorised

Authorised by the UK's Financial Conduct Authority, so your money is highly secure.

No Hidden Fees & 0% Commission

So you get a highly competitive saving when you exchange currencies.

Same Day Transfers

Receive your money in your destination bank account the same day you send it, for most mainstream currencies.

Highly Competitive Exchange Rates

Get bigger savings, with highly competitive exchange rates guaranteed!

Dedicated Personal Service

To guide you through the transfer process, and keep you up-to-date with the changing exchange rates.

Trusted Foreign Exchange Broker

Since we were established in 2006, we've transferred money for thousands of satisfied clients.

How It Works

  • Quote

    Use our form to get a free exchange rate quote, and find out how much you could save with Pure FX.
  • Register

    We'll be in touch to give you your exchange rate quote, ask you any further questions and tell you how the transfer process works.
  • Transfer

    From buying a property abroad, to making business transfers, or online selling - we have you covered.