Pound Sterling Money Transfers: GBP Exchange Rate Falls Ahead BOE Announcement

Data out overnight from China showing that Chinese exports and imports rebounded strongly in December not only point to solid economic growth both in China and abroad for the year ahead but gave a big boost to overnight Far East Asian markets increasing risk appetite which favours the high yielding currencies like the Australian and New Zealand dollars and South African Rand.

Data showed that Chinese exports rose by 14.1% December to December, the fastest rate of growth in seven months and well above November’s 2.9% rate. Imports increased by 6% in December from a year earlier. Both figures were well ahead of consensus forecasts.

The data also showed that China registered a $31.6 billion trade surplus in December, up from $19.6 billion in November.

For the calendar year 2012, China registered a trade surplus of $231 billion, more than 50% larger than a year earlier, breaking a streak of three straight annual declines.

Meanwhile, the Obama administration publicly signalled its growing concern about a possible UK exit from the European Union, just days before Prime Minister David Cameron sets out plans for a referendum on the issue. US diplomats have privately warned for months that Mr Cameron risked putting the UK on a path to exit the EU with his plan to renegotiate the UK’s EU membership terms and put the “new settlement” to a referendum.

In an unusually forthright public declaration, the Obama administration has now taken the unusual step of publicly briefing British journalists that it firmly believes the “special relationship” between the US and UK is best served in its view by the UK remaining at the heart of Europe.

The pound continues to fall across the board ahead of today’s Bank of England (BoE) monthly policy announcement. Today also sees the monthly policy announcement by the European Central Bank (ECB). Both the BoE and ECB are widely expected to keep interest rates and monetary policy unchanged.