UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate and the Pound Sterling to US Dollar (GBP/USD) exchange rate were trending within a limited range on Tuesday morning.
With so much uncertainty regarding Federal Reserve opacity, the true extent of the Volkswagen scandal, China’s economic stability and commodity prices it is perhaps unsurprising that trade has been subdued of late. The US Dollar has weakened after poor data results which pushed the Euro higher thanks to negative correlation. The British Pound has edged lower in response to soft domestic data, but has seen little by way of significant volatility in recent weeks.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3511.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5147.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Conversion Rate Predicted to Decline on Negative EUR/USD Correlation
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a tight range on Monday afternoon.
After British data failed to meet with expectations, demand for the Pound Sterling cooled. The Market Services PMI was forecast to tick higher from 55.6 to 56.0 in September, but output in the sector dropped to 53.3. This is particularly disappointing for Sterling traders given that the services sector makes up the vast majority of British Gross Domestic Product. The result reaffirms concerns that the UK’s third-quarter growth slowed in comparison to the previous quarter.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3549.
Despite the fact that European economic data produced a mixed-bag of results erring towards the negative, the single currency rallied versus its most traded peers. This is mainly due to EUR/USD negative correlation as recent US jobs data continues to weigh on demand for the North American asset. Spanish, Italian, German and Eurozone Composite and Services PMIs all failed to meet with respective market consensuses. French Composite and Services PMIs did better estimates, however, as did Spanish Consumer Confidence in September. In addition, Eurozone Retail Sales for August exceeded expectations.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3461 during Monday’s European session.
GBP/EUR Exchange Rate Forecast to Hold Losses despite ECB QE Concerns
Although the threat of deflation in the Eurozone has caused many analysts to predict that the European Central Bank (ECB) will be forced to expand quantitative easing, the shared currency is likely to hold gains versus its British counterpart. With that being said, however, positive results from US data could cause the common currency to trim gains.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.3557 during Monday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Predicted to Trend Statically as Poor NFP Report Weighs on the ‘Buck’
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a narrow range on Monday afternoon
In response to the poor UK services data, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply stated; ‘The further softening of growth in the services sector must now be causing some concern for the sustainability of the recent recovery in the UK economy. Respondents pointed to reluctance from clients in placing contracts, and their faith in business buffeted by a global economy suffering from sluggish activity. It appears that when China sneezes, the world catches a cold as some companies cited the region as a cause for worldwide concern. Employment levels were the only bright spot, showing a strong rise and at the most robust rate since June, though firms also reported an impact on costs with higher wages and concerns about the effects of the Living Wage. Almost half of procurement managers retained an upbeat view of business expectations, but overall sentiment was the weakest in 13 months. Business activity growth slowing to a 29-month low is not the best news from the sector.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5174.
After Friday’s US Non-Farm Payrolls data shocked to the downside, demand for the North American asset cooled significantly. Many traders have now been forced to delay bets regarding the timing of a Federal Reserve Rate hike as the state of the domestic economy weighs on policymaker decisions. ‘It’s weak through and through,’ stated New-York based economist Thomas Simons. Because such thoroughly disappointing reports are so rare, ‘we probably won’t see it again next time around.’
Both September’s Non-Manufacturing Composite and Labour Market Conditions Change failed to meet with expectations which saw continued damp demand for the US asset during Monday’s European session. The Federal Reserve are unlikely to move on rates until labour market conditions have improved amid fears that families won’t cope even with a tiny incremental rise.
The Pound Sterling to US Dollar (GBP/USD) exchange rate has fallen to a low of 1.5169 during Monday’s European session.
GBP/USD Conversion Rate Forecast to Hold Steady ahead of ISM Report
With demand for the UK and the North American assets cooling in the face of poor data results, the GBP/USD pairing is likely to hold steady ahead of the US data. However, even very positive results from future US ecostats may not be enough to overshadow bearish bets with regards to the timing of a Federal Reserve benchmark rate hike.
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced to a high of 1.5245 during Monday’s European session.
