The Pound Sterling Live

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The pound to euro exchange rate is 0.07 pct in the red at 1.1817.

The pound to US dollar exchange rate is 0.12 pct lower at 1.5345.

The pound to Australian dollar exchange rate is 0.32 pct higher at 1.5374.

Please note that the above quotes are taken from the wholesale currency markets - your bank will affix their own discretionary spread when passing on their retail rate. However, an independent FX provider will guarantee to beat your bank's offer, thus delivering you more currency. Please find out more here.

12:07: Pound euro in dramatic moves should UK pull out of EU

London’s Mayor Boris Johnson says country should be prepared to leave the EU.

What would this mean for the pound to euro exchange rate?

"One final point: we believe that the EUR will be a significant, bordering on dramatic “sell” if the UK edges closer to exiting the single market," says Stephen Gallo at BMO Capital Markets.

We will keep our eye open for further developments on this.

11:12: Business confidence improves

One positive piece of data out of the UK today:

UK business confidence improved this month, driven by steadily climbing optimism levels in the services sector. However, overall UK business confidence is still below the 95.0 mark that indicates growth, as the outlook for the manufacturing sector remains bleak, according to the latest Business Trends report by accountants and business advisers BDO LLP.

10:30: The agenda for the pound sterling this week

Chris Walker at Barclays:

"The UK’s quarterly inflation report is due on Wednesday but there should be limited impact on GBP. Relative to February, conditions have changed little.

"On the margin, weaker commodity prices might lead to a slightly lower CPI profile but we do not expect a reaction similar to February.

"Monthly labour market data are also due (Thursday). We expect jobless claims -3k of (cf -4.5k) and the unemployment rate to stay at 7.9%. We expect the labour market to deteriorate in the second half of this year, which should act as a further drag on the UK’s output gap.

"Earnings data will also be important given the downside surprise last month. We expect core earnings to fall further to just +0.8% 3m/3m. From current levels we favour GBP downside versus the dollar."

10:16: GBP and EUR both forecasted to decline against the US dollar

Barclays analyst Chris Walker says he sees both EUR and GBP eventually succumbing to the US dollar:

"The euro and sterling have held up to the wider USD strength relatively well. While we respect that resilience, we expect the medium-term downtrends in both EUR/USD and GBP/USD to be re-established.  

"With few near term catalysts however, trading should be relatively choppy for both. Equity markets remain supported and investors continue to search for yield, but the idiosyncratic stories of FX are beginning to make a return."

9:23: BoE Inflation Report is key risk

UniCredit Bank:

"Cable is also back-pedalling towards 1.53 and fears of weaker UK GDP forecasts in the upcoming BoE Inflation Report might add pressure. Yet, the lower EUR is likely to slow any EUR-GBP rally towards 0.85."

8:50: GBP in strong start to new week

The British pound sterling (Currency:GBP) is trading firmer across the board today:

The pound to euro exchange rate is 0.13 pct higher at 1.1843.

The pound to US dollar exchange rate is 0.15 pct up at 1.5378.

The pound to Australian dollar exchange rate is 0.27 pct higher at 1.5383.

8:45: GBP/USD uptrend under threat


Lloyds Bank on the forecasted performance of the pound to US dollar exchange rate:

"The GBP/USD uptrend since mid March is threatened by the USD strength of the last few sessions, but we would still be wary of assuming further major GBP/USD weakness given recent better UK data and the still short GBP positions still evident in the CME data.

"There is support in the 1.5290/1.5310 area, but if this breaks a test of 1.52 looks likely. However, if this happens it is likely to be a product of general USD strength, and there is little reason to expect EUR/GBP to break out of the 0.84-0.8490 range."