The Pound Sterling (GBP) has fallen by -0.3% against the Euro (GBP/EUR) and by -0.5% against the US Dollar (GBP/USD) today; this comes as the UK Public Sector Net Borrowing figure and its variant have both posted to show an expansion of UK debt.
Fed’s Lockhart may Deliver Second Consecutive Boost to US Dollar’s Prospects Tonight
The Pound (GBP) doesn’t seem likely to reverse its current downtrend against the Euro (GBP/EUR) and the US Dollar (GBP/USD) in the immediate future; while predictions have been positive, the only remaining UK economic release of the week isn’t due until Thursday. In the meantime, the Eurozone Consumer Confidence score for September is out soon and later on will bring the second speech by Fed Bank of Atlanta President Dennis Lockhart in as many days. A fractional deterioration is predicted for the Eurozone result, while anything hawkish (as before) from Lockhart will likely bolster the ‘Buck’ (USD) considerably.
The Pound Sterling (GBP) has risen by 0.2% against the Euro (GBP/EUR) and the US Dollar (GBP/USD) today; this comes as Chancellor George Osborne seeks to strengthen economic and cultural ties between the UK and China on a current visit.
Biggest UK Data Day of the Week to Come Tomorrow; Patchy Eurozone and US Results Ahead
The UK economy has benefitted today from Osborne’s economic visit to China; the most noticeable evidence of this has come in the form of a £2bn investment from China in Hinkley Point C nuclear power plant, as well as a £50m joint nuclear energy research centre.
The most recent Eurozone news has been that Alexis Tsipras’ Syriza party have claimed victory for the second time in a year, forming a majority government with the Independent Greeks party. This (hopefully) lasting stability has boosted confidence in the Euro (EUR), as the current Greek parliament is once again faced with the task of paying off debts and shoring up the economy.
The US Dollar (USD) has had an average performance today, mostly on account of a lingering dissatisfaction to the Fed’s interest rate freeze last week.
In the future, the next biggest results in the trinity will be the UK Public Finances and Public Sector Net Borrowing for August, released tomorrow.
The Pound Sterling is on the back-foot against the Euro (GBP/EUR) and the US Dollar (GBP/USD) this coming week, as there is a distinct imbalance between the quantity and quality of planned UK data releases and those for the Eurozone and US.
GBP/EUR, GBP/USD Exchange Rate News: Pound Hits Multi-Week Best Rate against US Dollar after FOMC
The Pound Sterling (GBP) began last week poorly, mainly due to a lack of impactful data releases on Monday and a lingering negative reaction to the Bank of England (BoE) downgrade on their inflation rate expectations from 2.2% to 2% over the next 12 months. On Tuesday, the news that the UK annual inflation rate for August had dropped from 0.1% to 0% was met with a mixed reception; the recent BoE minutes had forecast the UK inflation rate to remain at or close to 0% until the end of the year, but as the day wore on, the mood turned increasingly sour, with Sterling dropping to 1.3602 against the Euro (GBP/EUR) and 1.5332 against the US Dollar (GBP/USD).
On the other side of the equation, Sterling’s finest hour in the pairings last week came a day later on Wednesday when the UK Earnings and Employment results for July came through strongly for the Pound, showing rises in Earnings and the number of employed persons and a drop from 5.6% to 5.5% in the UK Unemployment Rate for the three months to the end of July.
US Dollar & Euro Exchange Rates Dip: 2015 Fed Rate Hike Bets Drop, Greek Election Ahead
Unlike the Pound (GBP), the Euro (EUR) and the US Dollar (USD) were harmed on a whole last week by their economic publications, although the losses were substantially greater for the US Dollar. The Euro’s worst moments came on Tuesday and Wednesday with the ZEW Surveys for September and the Eurozone CPIs for August. While on Tuesday the German Survey of the Current Situation saw a rise from 65.7 to 67.5, the future was less bright according to the German and Eurozone Economic Sentiment Surveys, which both fell far below the declines that had been predicted. With the CPIs, declines were also seen, although this was a comparatively worse result given that no drops had been predicted.
The biggest US news of the week (and perhaps the month) came on Thursday evening with the announcement of the Federal Open Market Committee’s (FOMC) Interest Rate Decision, which resulted in a freeze at 0.25%. Although it seemed that a majority of economists had resigned themselves to seeing no change, the proportion of optimistic investors was apparently still significantly high, given that the ‘Buck’ crashed against all of its rivals following the announcement.
GBP, EUR, USD Exchange Rate Forecast: Little UK Data means EUR and USD may Rise Again
The coming week holds few releases of major importance for the Pound Sterling, therefore the comparatively abundant Eurozone and US results are set to dictate the flow of proceedings. The most significant of these are the range of Eurozone Manufacturing and Services PMIs for September set to come out on Wednesday. No predictions have currently been made. For the US Dollar, the Durable Goods Orders for August are considered the biggest ‘Greenback’ news of the week; predictions have been made for this outcome – pessimistically; a 2.2% fall is expected on the previous 2%.
Most immediately, however, the voting for the 2nd Greek Election of 2015 is due today, with a result likely to be announced later tonight or early tomorrow. In terms of leadership composition, it seems that a Syriza/New Democracy-led government will appease speculators, while anything that involves the radical anti-Europe parties is unlikely to inspire a tremendous amount of confidence in Greece’s future prospects in the Eurozone.
Last Week’s Closing GBP, EUR, USD Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3675, the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7314, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5631, the US Dollar to Pound Sterling (USD/GBP) exchange rate was trending in the region of 0.6398, the Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1430, and the US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8752 near to the close of the European trading session last week.