The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a narrow range on Wednesday morning.
After UK manufacturing data met with the median market forecast, the Pound edged higher versus many of its major peers. The appreciation is likely to be very gradual, however, with the weight of political uncertainty having a detrimental effect on trader confidence.
The shared currency, meanwhile, is holding relatively steady versus most of its major peers. After having declined significantly over the past few days, positive domestic data has curbed the trend. The weight of geopolitical tension is still likely to stymie demand for the Euro, however.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3795.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate rallied by around 0.58% on Tuesday morning, while the Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.28%.
After British economic data bettered estimates, the Pound strengthened versus many of its most traded currency rivals. The appreciation has been somewhat laboured, however, with the weight of political uncertainties dampening investor confidence as we draw ever nearer to the UK general election.
The Euro, meanwhile, softened versus nearly all of its major peers despite German data producing positive results. The declination can be attributed to renewed fears of a Grexit and the potential for Greece to ally with Russia after creditors rejected Athens’ latest reform proposal.
The US Dollar continues to enjoy a bullish run versus the vast majority of its most traded currency competitors. Monday’s positive domestic data fuelled the advance initiated by hawkish comments from Federal Reserve Chair Janet Yellen.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3752.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4759.
Pound Sterling (GBP) Exchange Rate Edges Higher on Q4 GDP
With the forthcoming British general election causing political uncertainties, the Pound has struggled from lack of demand. Opinion polls aren’t showing a clear majority for any party which has fuelled speculation that the UK will be subject to a number of policy changes.
However, positive domestic data allowed the Pound to edge higher versus many of its most traded rivals, albeit somewhat sluggishly. Of particular note was the final figure for fourth-quarter Gross Domestic Product which came in at 3.0% on the year, eclipsing the median market forecast of 2.7% growth.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Gains after Greek Reform Rejected
German economic data printed very positively on Tuesday, however the impact was minimal with geopolitical tensions dominating trade. One such positive data result was German Unemployment Rate which saw a seasonally adjusted score of 6.4%, bettering the market consensus of 6.5% unemployment.
After the latest reform program from Athens was rejected by creditors, the shared currency slumped versus the majority of its most traded currency counterparts. The declination continued with speculation mounting that Greece will be forced to join forces with Russia in order to source the vital aid they require to get out of their financial crisis.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Down ahead of Consumer Confidence
After Fed Chair Janet Yellen made hawkish comments with regards to a sooner-than-expected benchmark rate hike, the US Dollar strengthened. The appreciation has continued since, fuelled by positive domestic data results and demand for safe-haven assets.
There will be several influential domestic data publications later on Tuesday with the potential to provoke changes for the US Dollar. Perhaps the most significant of these is Consumer Confidence, which is forecast to equal the previous figure of 96.4.
Pound Sterling to Euro (GBP/EUR) and US Dollar (GBP/USD) Exchange Rates Forecast to Hold Steady
Although the US consumer confidence data certainly has the potential to initiate US Dollar movement, it is also very possible that the impact will be minimal with the positivity already priced-in. Given the lack of British and European data to curb the trend, the Pound Sterling to Euro (GBP/EUR) is likely to hold at 1.37, and the Pound Sterling to US Dollar (GBP/USD) exchange rate could hold at 1.47.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3652 to 1.3767.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the parameters of 1.4751 to 1.4816.
