AP: Exchange rates: British Pound in for a busy week
The news flow out of the UK economy is expected to be quiet today, but the British Pound can expect a busy week ahead.
The Pound Dollar exchange rate is 0.775% higher on the hour with 1 GBP = 1.5470 USD.
The Pound Euro exchange rate is 0.003% lower on the hour with 1 GBP = 1.2071 EUR.
The Pound Australian dollar exchange rate is 0.105% higher with 1 GBP = 1.6590 AUD.
There are no major economic data releases coming out of the UK economy today, however forex trade will be conducted with a view a busy week ahead for UK eco-stats.
The GBP EUR dipped back below 1.21 in early trading on Friday, but the British Pound recovered to close virtually unchanged.
Sterling had been supported by corporate dividend demand but gains were limited, particularly as many investors were taking profits ahead of the weekend on sterling's gains versus the euro earlier in the week.
The pound was also pressured as weaker-than-expected producer prices data on Friday simple increased the likelihood that the BoE will hold off from raising interest rates until well into 2011.
However, traders have had to balance UK fiscal worries against renewed market concern about Europe's banking sector and as yet there appears to be little chance of the price breaking out of its current range.
In trading this morning, sterling has edged lower tracking the euro's gains against the US dollar in the wake of the new Basel III rules that were revealed last night.
"In terms of data, the calendar is quiet today but making up for the absence of any key releases, the rest of the week is expected to be a busy one with UK inflation figures kicking things off tomorrow," says a note from the dealing desk at Caxton Fx.
GBP USD
Having hit the bottom of its recent trading range around $1.5350, the price has bounced and sterling has surged a cent higher today with risk appetite lifted.
Upbeat data from China and an agreement on new banking rules have boosted investor sentiment with the US dollar down against most of its peers.
Jean-Claude Trichet said that the new Basel III rules represent "a fundamental strengthening of global capital standards" that will give substantial support to long-term stability.
Without any key data sterling should hold onto its gains through the day but with UK figures due out this week and amid growing concern about the UK economy, sterling's rally is unlikely to stretch too much further.
