The British Pound to Euro (GBP/EUR), British Pound to US Dollar (GBP/USD) and British Pound to Canadian Dollar (GBP/CAD) exchange rates were all trending lower on Tuesday as UK general election fears heightened.
Earlier… The British Pound to Euro (GBP/EUR) exchange rate softened in the second half of Monday’s European session while the British Pound to US Dollar (GBP/USD) and British Pound to Canadian Dollar (GBP/CAD) exchange rates advanced on weak US Industrial and Manufacturing Production figures and the price of oil tumbled to $44 per barrel.
US Manufacturing Production slipped by -0.25 in February rather than stagnating as forecasts had suggested.
The British Pound to Euro (GBP/EUR) began Monday’s European session trending lower, while the British Pound to US Dollar (GBP/USD) and British Pound to Canadian Dollar (GBP/CAD) exchange rates recorded gains after UK Rightmove House Prices recorded 1.0% growth in March.
However, on the year, Rightmove House Prices slipped from 6.6% to 5.4%.
The British Pound to Euro (GBP/EUR), British Pound to US Dollar (GBP/USD) and British Pound to Canadian Dollar (GBP/CAD) exchange rates could all be in for some influential movement in the week ahead with both the Bank of England (BoE) and the US Federal Reserve in the spotlight for interest rates this week.
British Pound Exchange Rate Forecast: GBP/EUR, GBP/USD, GBP/CAD
Wednesday will see the release of the BoE’s most recent meeting minutes which could severely impact the British Pound. If any policymakers went against the grain of the general Monetary Policy Committee (MPC) consensus and voted in favour of rate hikes, the British Pound would be likely to rally.
Meanwhile, the Federal Open Market Committee (FOMC) is scheduled to release its most recent interest rate decision in Wednesday’s American session and could send ripples through the market. The Federal Reserve is expected to be keeping rates on hold in the near future as global falls in inflation play havoc with economic progression in many nations.
The Canadian Dollar has been particularly affected by the tumbling price of oil, which is accredited to the drop in worldwide inflation. Crude is Canada’s largest commodity and therefore any developments within the commodities market directly impact the ‘Loonie’.
Canadian Inflation Forecast to Cause Canadian Dollar (CAD) Exchange Rate Movement
Canadian Dollar trading could seriously heat up on Friday when the Canadian Consumer Price Indexes are released. The Bank of Canada (BOC) will release its own inflation report alongside another Consumer Price Index and investors will carefully eye Canada’s inflationary levels for a sign of whether the BOC will conduct another rate cut in the near future.
The Eurozone has just begun a period of quantitative easing (QE) and that development in itself sets the Euro apart from other major currencies such as the Pound and the US Dollar.
However, any favourable data released next week could offer the Euro to British Pound (EUR/GBP) exchange rate a helping hand up. Tuesday will see the release of German and Eurozone ZEW Economic Sentiment Surveys. In addition, ZEW’s German Current Situation Index will also be released.
Eurozone final Consumer Price Index figures are also scheduled for release and could play a part in Euro movement if not in line with flash forecasts.
The European Central Bank (ECB) is to release its Economic Bulletin on Thursday and could moderately influence the Euro exchange rate. The Euro is also forecast to fluctuate on any developments in the ongoing Greek negotiations.
The end of the week became fraught with squabbles between Germany and Greece causing investors to seriously price in the prospect of a Grexit.
In the week ahead, if any influential institutions make comments on the Organisation of Petroleum Exporting Countries (OPEC) and the current production output of oil, the Canadian Dollar to British Pound (CAD/GBP) exchange rate could be impacted.
The UK Rightmove House Price Index will be published on Monday and could influence the GBP/EUR, GBP/USD, GBP/CAD exchange rates.
On Friday, the British Pound to US Dollar (GBP/USD) exchange rate was trading at 1.4744. The British Pound to Canadian Dollar (GBP/CAD) exchange rate was reaching 1.8859. The British Pound to Euro (GBP/EUR) exchange rate was trending in the region of 1.4015.