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GBP/EUR Exchange Rate Holds Below 1.37, GBP/USD Trending within a Tight Range ahead of US GDP

UPDATE

The Pound Sterling to Euro (GBP/EUR) exchange rate edged higher by around 0.3% on Thursday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a narrow range.

With recent events in China causing traders to push back bets as to the timing of a Bank of England (BoE) rate hike from Q1 to Q3 of 2016, the Pound slumped versus the majority of its peers during Wednesday’s European session. Although Nationwide House Prices exceeded expectations in August on an annual basis, the Pound is still holding a relatively weak position versus its major peers.

Despite dovish comments from European Central Bank (ECB) officials, the shared currency managed to hold a comparative position of strength versus its currency rivals. Credit Agricole analysts forecast near-term upward pressure for the single currency as traders pare back bets as to the timing of a BoE and Federal Reserve benchmark rate hike.

After a robust Durable Goods Orders print caused the US Dollar to advance versus its currency competitors during Wednesday’s European session, the ‘Greenback’ (USD) is holding gains during Thursday’s London session. US Gross Domestic Product data, due for publication during the North American session, is likely to cause significant volatility for the US asset.

The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3683.

The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5475.

Yesterday…

Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Strengthen ahead of ECB’s Praet Speech

The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.6% on Wednesday afternoon.

In response to demand for assets with minimal connection to China’s equity market and given that the Bank of England (BoE) benchmark cash rate is comparatively high against other major central banks, the Pound has become an attractive asset for traders to park money with. This has seen the UK asset strengthen versus many of its currency rivals. Aiding the uptrend on Wednesday was slightly better-than-expected domestic data which showed July’s Loans for House Purchase came in at 46033.

The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3654.

After surging significantly during the chaos of ‘Black Monday’, the shared currency has since gradually softened. The depreciation was aided by a speech from European Central Bank (ECB) Vice President Vitor Constancio who warned that the central bank could intervene if the inflation outlook remains disappointing. ECB Executive Board Member Peter Praet is due to give a speech later today and most expect him to echo Constancio’s dovish sentiment.

The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3580 to 1.3690 during Wednesday’s European session.

Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Decline ahead of US Data

The Pound Sterling to US Dollar (GBP/USD) exchange rate edged lower by around -0.7% on Wednesday afternoon.

Reporting on the UK mortgage approvals data, Reuters journalist Ana Nicolaci da Costa stated; ‘The number of mortgage approvals in Britain rose in July to their highest level in 17 months, the British Bankers’ Association said on Wednesday, the latest sign that Britain’s housing sector is rebounding. British banks approved 46,033 mortgages for house purchases, the highest number since February 2014. That was up from 44,802 in June and up 11 percent from a year ago. The number of mortgages approved for remortgaging jumped 29 percent and was its highest in four years.’

The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5585.

During Tuesday’s European session the US Dollar rallied versus its major peers in response to better-than-expected Consumer Confidence. Wednesday has seen a continuation of US Dollar gains as traders look towards the Durable Goods Orders report. Should US data print positively it is likely to reignite hopes of a Federal Reserve benchmark rate hike within the next few policy meetings.

The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5575 to 1.5721 during Wednesday’s European session.