Pound Sterling to Euro (GBP/EUR) Conversion Rate Predicted to Rally despite Weak Domestic Ecostats
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.9% on Wednesday afternoon.
Despite the fact that British ecostats failed to meet with economists’ forecasts today, the Pound advanced versus nearly all of its major peers. The appreciation is mostly the result of correctional trading as pundits take advantage of the Pound’s low trade weighting. On the year, December’s Industrial Production unexpectedly contracted by -0.4%, with the monthly reading contracting by -1.1%. December’s Manufacturing Production saw output decline beyond expectations with the annual data falling by -1.7% and the monthly result dropping by -0.2%.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.2926.
Meanwhile, the single currency declined versus nearly all of its major peers despite a complete absence of influential domestic data to provoke volatility. The depreciation is partly the result of traders profit taking after recent Euro gains opened up some attractive selling positions. Also weighing on demand for the common asset was the drop in oil prices which has reintroduced concerns regarding the tepid rate of Eurozone inflationary growth. Later today, US data has the potential to impact Euro movement thanks to EUR/USD negative correlation.
Pound Sterling to US Dollar (GBP/USD) Conversion Rate Predicted to Strengthen ahead of Yellen Speech
The Pound Sterling to US Dollar (GBP/USD) exchange rate ticked higher by around 0.8% on Wednesday afternoon.
Commenting on the UK’s disappointing sectoral data, Howard Archer at IHS Global Insight stated; ‘December’s sharp drop in industrial production will fuel concerns about the UK economic outlook as well as the unbalanced nature of growth. It will also likely harden views that the Bank of England will not be raising interest rates during 2016. 2016 looks like it will be another challenging year for UK manufacturers. Manufacturers will be concerned that the current increasingly fraught looking global economic outlook will weigh down on export orders. Manufacturers will also likely be worried that demand for capital goods will be constrained by uncertainty over the global economic outlook and also over the UK referendum on EU membership causing companies to become more cautious in their investment plans.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4563.
As traders await a speech from Federal Reserve Chairwoman Janet Yellen, the US Dollar has softened versus most of its currency rivals. The depreciation can be linked to speculation that Yellen will attempt to talk down the value of the US Dollar. In order to do this, Yellen is likely to deliver a dovish speech with regards to policy outlook. After US growth was shown to have missed expectations in the fourth-quarter many analysts have been forced to reduce bets with regards to the number of Fed overnight cash rate hikes likely to occur in 2016.
Pound Sterling Forecast: UK GDP Estimate to Provoke Volatility
Later this afternoon, the British NIESR Gross Domestic Product Estimate has the potential to provoke Sterling volatility. Fed Chair Janet Yellen’s speech is also very likely to provoke market volatility and therefore changes for the GBP/EUR and GBP/USD exchange rates.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.2780 to 1.2937 during Wednesday’s European session.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.4439 to 1.4578.