The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.36% on Thursday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a narrow range.
The British asset strengthened on Thursday morning amid fears Wednesday’s depreciation was overdone. Although labour market data produced mostly poor results, the fact that wage growth accelerated at the fastest pace in over five years has supported demand for the Pound. The Pound has reached a fresh 7-year high against the single currency.
Despite the fact that Greek Prime Minister Alexis Tsipras managed to convince the government to accept the terms of the third bailout deal, the single currency softened versus its peers. This is due to the fact that so many of the Syriza party voted against the deal that there will almost certainly be a cabinet reshuffle. Also, Tsipras’ authority has been called into question so there is the very real prospect of a snap election. Anti-austerity protesters took to the street and violence ensued with Greek police resorting to tear gas to disperse crowds.
The US Dollar is holding a relative position of strength after Federal Reserve Chairwoman Janet Yellen stated that a benchmark rate hike was on the cards for 2015. Yellen will speak to the Senate Banking Panel later today but is likely to repeat Wednesday’s testimony.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4325.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5623.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Decline despite Greek Deal Uncertainties
The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.17% on Wednesday morning.
The British asset declined versus the majority of its most traded currency competitors on Wednesday morning after labour market data produced mostly poor results. June’s Jobless Claims Change saw 7,000 new claimants, which was significantly lower than the median market forecast for a -9,000 decline. However, June’s Claimant Count Rate held at 2.3%. Average Weekly Earnings failed to advance as much as predicted in May having risen by 3.2% instead of 3.3%. May’s Unemployment Rate increased from 5.5% to 5.6% and Employment Change declined by -67,000.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4177.
There is mounting pessimism regarding the viability of the latest deal for Greece to unlock bailout funds. The deal includes no form of debt relief, and the International Monetary Fund (IMF) stated that it would be impossible for Greece to sustain an economic recovery with debt rising close to 200% of their gross domestic product. This has seen subdued volatility for the common currency as uncertainty hinders investor confidence. Greek MPs will decide tonight whether to accept the deal, but many fear that it won’t help matters if they do.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4143 to 1.4238 during Wednesday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Trend within Limited Range ahead of US Factory Output Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a narrow range on Wednesday morning.
In response to the British labour market data, the Office for National Statistics (ONS) stated; ‘Comparing March to May 2015 with the 3 months to February 2015, the number of people in employment fell by 67,000 (to reach 30.98 million), the number of unemployed people increased by 15,000 (to reach 1.85 million) and the number of people not in the labour force (economically inactive) aged from 16 to 64 increased by 30,000 (to reach 9.02 million).’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5631.
The US Dollar is generally holding a weak position versus its peers after Tuesday’s data showed Advance Retail Sales declined by -0.3%. This caused many rate hawks to pare bets as to the timing of a Federal Reserve rate hike. With several domestic data publications due on Wednesday, including factory output data, futures traders will be hoping for positive results to pressure the Fed into hiking the lending rate in 2015.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5600 to 1.5675 during Wednesday’s European session.