The Pound Sterling to Euro (GBP/EUR) exchange rate climbed in the first half of Friday’s European session while the Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.20% after a mixed bag of UK data.
UK Construction Data Causes GDP Revisions, Pound Sterling (GBP) Exchange Rate Jumps +0.57% versus Euro (GBP/EUR)
The UK’s Construction Output figure caused some confusion after initially being forecast to decline from 1.6% to 0.5% in April on the year. However, the March ecostat was positively revised to 5.0%, allowing the April figure to decline to 1.5% after the month registered a -0.8% contraction.
Additionally, the Office for National Statistics (ONS) stated that the UK’s economic growth was healthier than previously thought in Q1. This year’s first quarter growth was upwardly revised from 0.3% to 0.4%, while 2014’s Gross Domestic Product (GDP) rose by 3.1% instead of the 2.8% economists had initially calculated.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending at 1.5503.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3866.
US Dollar (USD) Exchange Rate Forecast to Climb on Confidence Surge and Fed Rate Hike Speculation
Meanwhile, the US Dollar (USD) exchange rate is awaiting the highly influential University of Michigan US Consumer Confidence ecostat due out later in Friday’s trading.
The figure is forecast to climb from 90.7 to 91.4 in June and could be an event that spurs a US Dollar (USD) rally.
Any favourable US data is likely to cause speculation that the Federal Reserve could be closer to hiking interest rates and would see a dramatic increase in investor sentiment.
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trending at 0.6451.
The US Dollar to Euro (USD/EUR) exchange rate is trending in the region of 0.8947.
Euro (EUR) Exchange Rate Forecast to Fluctuate on Greek Uncertainty
Meanwhile, the Euro (EUR) exchange rate fell into trouble when talks between Greece and its creditors appeared to take a step backwards. Thursday saw the International Monetary Fund (IMF) remove its negotiating team from Brussels citing that little progress was accountable for the withdrawal.
Market analyst Market Hewson commented: ‘The announcement that IMF officials were walking away from the negotiations with Greece was as sudden as it was unexpected, as was the tone of the officials, who came across as extremely downbeat. In short, the verdict was scathing, with officials citing that the gaps between the relative negotiations positions hadn’t been bridged at all.’
‘The logjam appears to revolve around pension and labour market reform which Greece remains unwilling to compromise on, and when looking at the demonstrations that took place back in Athens yesterday it’s not hard to see why. Even if Greece does compromise on the issues the IMF wants change on, there is no guarantee that they would be able to implement them and therein lies the rub.’
Additionally, President of the European Council Donald Tusk spoke out yesterday, warning that if Greece couldn’t come to a resolution soon, the plug could be pulled on negotiations. It appears as if it’s finally time for some actual decisions to be made, after months of talks that have seen little to no progress.
The Euro to US Dollar (EUR/USD) exchange rate is trending at 1.1180.
The Euro to Pound Sterling (EUR/GBP) exchange rate is trending in the region of 0.7215.