The Pound Sterling to Euro (GBP/EUR) exchange rate declined by around -0.70% on Friday morning. The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a limited range.
After British economic data printed positively on Friday, the Pound held gains initiated from Thursday’s better-than-expected retail sales growth. The British asset is generally holding steady versus most of its major peers as traders fear a rally would see Sterling unjustly overvalued.
The shared currency, meanwhile, advanced in response to positive data out of the currency bloc’s most influential economy. However, given that Greece has made no progress towards unlocking bailout funds, the gains could be short-lived.
In response to mostly disappointing domestic data results on Thursday, the US Dollar was trending lower versus its major peers. The Dollar is generally holding losses as traders await inflation data due for publication later on Friday afternoon.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3977 today.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5644.
Pound Sterling (GBP) Exchange Rate Forecast to Hold Gains on Positive Data
British data showed government borrowing fell sharper-than-expected in April. This is particularly good news for Chancellor George Osborne who was tasked with reducing Britain’s large deficit. Public Sector Net Borrowing came in at 6.04 billion in April, slightly down from the previous figure of 6.06 billion and well below the median market forecast 7.4 billion.
A spokesman for the Treasury said: ‘Today’s figures show that our deficit reduction plan is working, with borrowing down £2.5bn compared to a year ago. We have more than halved the deficit, but at just under 5pc it is still one of the highest in the developed world. There is no shortcut to fixing the public finances so we have to continue with the hard work of identifying savings and making reforms necessary to finish the job and build a resilient economy.’
Euro (EUR) Exchange Rate Climbs on German GDP
As most economists expected, the Eurogroup meeting in Riga saw little by way of progress made towards Greece unlocking financial aid. With very little time left before the Hellenic nation runs out of cash, the need for Greece to bridge gaps is paramount lest they default on June’s International Monetary Fund (IMF) payments.
In spite of Greek woes, the shared currency advanced versus most of its major rivals on Friday. The appreciation can be linked to positive data out of Germany. German Gross Domestic Product met with the median market forecast for the final 1st-quarter growth of 1.1% on the year.
US Dollar (USD) Exchange Rate Softens ahead of Inflation Data
After Thursday’s US data printed disappointingly, the ‘Greenback’ (USD) softened versus its major competitors. Friday has seen the US asset continue to trend lower amid expectations that the Consumer Price Index will decline. ‘We’re just simply not too wrought up about inflation expectations at the moment,’ said Jim Vogel, interest-rate strategist with FTN Financial in Memphis, Tennessee.
Average Weekly Earnings data and a speech by Federal Reserve Chair Janet Yellen later on Friday will be of interest to those invested in the US Dollar.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3958 – 1.4049.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5634 – 1.5690.