The Pound Sterling to Euro (GBP/EUR) exchange rate was trending lower in Thursday’s European session, despite Greece rejecting its creditors’ reform proposal, while the Pound Sterling to Japanese Yen (GBP/JPY) and Pound Sterling to US Dollar (GBP/USD) exchange rates were trading higher ahead of the Bank of England’s (BoE) interest rate decision.
Euro (EUR) Exchange Rate Climbs as Eurozone Retail Sales Record Swiftest Rise in Four Years, Greece Rejects Proposals
Greece has been attempting to renegotiate its austerity deal since January when political party Syriza was voted into power. However, negotiations have made little progress and now we’re down to the wire as Friday’s International Monetary Fund (IMF) payment looms and Greece is due to run out of money any day now.
Greek Prime Minister Alexis Tsipras rejected the reform proposal submitted to the Greek government earlier this week, stating that Greece’s own proposal was the only ‘realistic’ one.
Our proposal continues to be the only realistic and constructive proposal. The discussions will continue. #Greece pic.twitter.com/VnxYbqxK9j
— Alexis Tsipras (@tsipras_eu) June 4, 2015
Meanwhile, upbeat data was able to boost the Euro (EUR) exchange rate despite the Greek uncertainty. Markit’s German Retail Purchasing Managers Index (PMI) climbed from 52.6 to 55.8 in May, while the Eurozone Retail PMI climbed into growth territory at 51.4 after the previous month’s 49.5.
The Markit report read: ‘May’s Eurozone Retail PMI data showed the fastest rise in sales in over four years, the upturn driven by strong growth in Germany.’
The Euro to Pound Sterling (EUR/GBP) exchange rate is trending in the region of 0.7363 with market movement of +0.25%.
US Dollar (USD) Exchange Rate Forecast for Movement on US Change in Non-Farm Payrolls and Federal Reserve Rate Hike Bets
Meanwhile, the US Dollar is forecast for an interesting close to the week with US Change in Non-Farm Payrolls and US Unemployment Rate stats due to emerge on Friday which could have a major influence on the US Dollar (USD).
Investors are hopeful that Friday’s labour market ecostats will print favourably and boost the US Dollar (USD) after Wednesday’s ADP Employment Change figure came in above forecasts at 201K. The ADP stat is used as an indicator for the month’s more influential US Change in Non-Farm Payrolls.
The US Federal Reserve has been consistent in stressing how important a strong labour market would be for the central bank’s considerations in hiking interest rates, a factor that’s caused some significant USD exchange rate movement in the past.
Thursday will see the release of US Initial Jobless Claims and US Continuing Claims figures which are expected to have a moderate impact on the USD exchange rate.
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trending in the region of 0.6943 with a market movement of -0.54%.
BoJ Governor Kuroda Invokes Power of Peter Pan to Encourage Positivity to Overcome Japan’s Low Inflation – Yen (JPY) Lower
Meanwhile, the Japanese Yen (JPY) remained in a tight range against the Pound (GBP) after the Bank of Japan (BOJ) Governor Haruhiko Kuroda made statements on the topic of monetary policy.
However, it seems as if the central banker surprised markets when he likened Japan’s monetary policy model to Peter Pan.
Quoting the literary genius of J.M Barrie in his Tokyo statement, Kuroda suggested that central bankers need to have more faith in their ability to solve frustrations such as low inflation.
BOJ’s Kuroda stated: ‘I trust that many of you are familiar with the story of Peter Pan, in which it says, the moment you doubt whether you can fly, you cease forever to be able to do it. Yes, what we need is a positive attitude and conviction.’
Governor Kuroda has been popular with many for his unwavering optimism and attempts to encourage positivity into the central bank, despite the pressures it faces. Japan has found itself struggling with deflation for over a decade and Kuroda’s latest mission is to get BOJ bankers out of the ‘deflationary mindset’, rather than letting it become a self-fulfilling prophecy.
While we like Governor Kuroda’s attempts to inspire central bankers, not everyone is his greatest fan.
Strategist at Bank of America Merrill Lynch Shuichi Ohsaki commented: ‘I still don’t believe he can fly.’
The Japanese Yen to Pound Sterling (JPY/GBP) exchange rate is trending in the region of 0.0052.
Pound Sterling to Euro (GBP/EUR), Japanese Yen (GBP/JPY), US Dollar (GBP/USD) Exchange Rate Forecast
The Pound Sterling to Euro (GBP/EUR), Pound Sterling to Japanese Yen (GBP/JPY) and Pound Sterling to US Dollar (GBP/JPY) exchange rates are all in for an interesting day on Thursday with the Bank of England due to announce its latest monetary policy decision.
Additionally, Friday will see the release of the BoE’s 12-Month Inflation Forecast which is likely to cause major GBP market movement.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending in the region of 1.5369. The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is trending at 191.2600. The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the vicinity of 1.3632.
