Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Tick Higher on Greek Uncertainty
The Pound Sterling to Euro (GBP/EUR) exchange rate gained by around 0.2% on Monday morning.
In response to better-than-expected British manufacturing output, the British Pound advanced versus many of its currency rivals. The seasonally-adjusted UK Manufacturing PMI was forecast to increase from 51.4 to 51.6 in July, but the actual result reached 51.9. In addition to manufacturing output supporting Sterling gains, the Pound also advanced thanks to a report from EY Item Club which showed that bank lending to businesses is set to rise this year for the first time since 2008. ‘With the economy growing at a steady pace and business investment set to rise at an annual average of 6.5% over the next three years, the forecast suggests that the days of lending contraction are in the past,’ said the group.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4241.
The shared currency, meanwhile, softened versus many of its currency competitors. The depreciation is mostly the result of uncertainty regarding Greece as officials are yet to secure terms for the Hellenic nation’s third bailout. The Greek stock market reopened today for the first time in five weeks. The opening was met with a 20% dive in stock prices and many forecast further losses as the day progresses. All this micrified relatively positive domestic data which showed German and Eurozone manufacturing output bettered estimates and Spanish Consumer Confidence eclipsed projections in July. However, Greek manufacturing output slumped to its lowest level on record in July, which highlights the significant domestic issues the cash-strapped country is facing.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4218 to 1.4259 during Monday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Hold Steady ahead of US Manufacturing Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a narrow range on Monday morning.
Rob Dobson, Senior Economist at Markit, explained why the British manufacturing data wasn’t met with a greater response in terms of demand for the Pound, stating; ‘Although an uptick in the headline PMI breaks the decelerating trend in UK manufacturing, growth remains near-stagnant and suggests that the sector is continuing to act as a drag on the economy. With the Sterling-Euro exchange rate still sapping export demand and constraining growth of total order inflows, it seems that we will again look to the service sector to sustain any semblance of reasonable economic growth in the third quarter.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5623.
As traders await US economic data due for publication later on Monday afternoon, the US Dollar is holding gains versus the majority of its most traded currency peers. Both Core Personal Consumption Expenditure and ISM Manufacturing have the potential to provoke changes for the ‘Greenback’ (USD). Many traders are predicting that the manufacturing data will better the market projection of 53.5 given that the most recent Markit manufacturing reading showed gains in the sector.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5608 to 1.5645 during Monday’s European session.