Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Soften despite Poor European Data
The Pound Sterling to Euro (GBP/EUR) exchange rate declined by around -0.4% on Friday morning.
With a lack of influential British data on Friday, the UK asset continues to hold a weak position after three consecutive days of uninspiring domestic data results. Of particular detriment to demand for the Pound was slower-than-expected services output. The services sector accounts for the largest portion of British Gross Domestic Product (GDP) so the subdued rate of output growth caused the Pound to dive versus many of its peers. Given the absence of further domestic data publications, Sterling is likely to hold a weak position versus the majority of its most traded currency rivals.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3664.
Despite the fact that European economic data produced poor results on Friday, the common currency advanced versus most of its major peers. The appreciation can be linked to concerns that Thursday’s Euro downtrend was overdone given most analysts expected the European Central Bank (ECB) to cut the growth and inflation forecasts. German Factory Orders unexpectedly contracted on the year in July, failing to meet with the market consensus of 0.4% growth. The German Construction PMI for August came in at 50.3, only just above the 50 mark which separated growth from contraction. Additionally, the Eurozone and German Retail PMIs both dropped from previous figures.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3647 to 1.3718 during Friday’s European session.
Pound Sterling to US Dollar (GBP/USD) Conversion Rate Predicted to Edge Lower ahead of US Non-Farm Payrolls
The Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.2% on Friday morning.
There will be several influential domestic data publications over the coming week with the potential to provoke changes for the Pound. Perhaps of most significance will be the Bank of England (BoE) inflation forecast for the next 12 months. This will give a good indication as to whether the economic slowdown in China is weighing on policymakers’ inflationary outlook given the poor health of the commodities market of late. The BoE Interest Rate Decision will not be as important because most analysts agree that the Monetary Policy Committee (MPC) is highly unlikely to change rates at this juncture.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5220.
As traders await US jobs data, the Dollar is generally trending higher versus its major peers. Most analysts agree that the Non-Farm Payrolls and Unemployment Rate will be the most important US data publication ahead of September’s Federal Reserve interest rate decision. A positive result from these publications will provoke many traders to push forward bets of a September liftoff. However, Goldman Sachs analysts have predicted that the Non-Farm Payrolls report will fail to meet with expectations because August’s forecasts have been overestimated since 2010.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5211 to 1.5258 during Friday’s European session.
