GBP/EUR and GBP/USD Exchange Rates Trending Higher, Pound Supported by UK Services Data
Both the GBP/EUR and GBP/USD exchange rates gained on Wednesday as Sterling continued to derive support from the previous day’s impressive UK services PMI.
The Pound’s gains against the Euro were also enabled by a less-than-impressive German Factory Orders report, while Sterling’s 0.5% daily gain on the US Dollar was largely due to bets that the minutes from the Federal Open Market Committee’s latest policy meeting will be dovish in tone.
Should the minutes indicate that the Fed intends to hold off on increasing borrowing costs, the Pound could push to the 1.50 level before the close of trading.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3714
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.4891
Pound Sterling to Euro (GBP/EUR) Exchange Rate Recovers Losses, Pound Sterling to US Dollar (GBP/USD) Currency Pair Slides
As European markets reopened following the Easter break, the Pound Sterling to Euro (GBP/EUR) exchange rate consolidated and extended gains while the Pound Sterling to US Dollar (GBP/USD) exchange rate gave up the advance recorded following Friday’s disappointing US employment report.
The GBP/USD pairing continued trending lower in spite of the UK’s Services PMI showing unexpected improvement.
The gauge bounced from 56.7 to 58.9, showing the strongest service sector growth since the middle of last year. The result outweighed positive ecostats from the Eurozone and helped the GBP/EUR pairing advance 0.5% on the day’s opening levels.
However, with the Federal Open Market Committee’s policy meeting minutes scheduled for publication later this week, the ‘Greenback’ was able to advance from the lows struck in the immediate aftermath of the NFP report’s publication.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3674 before advancing above 1.37 on renewed Greek concerns.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trading in the region of 1.4853
The Pound Sterling to Euro (GBP/EUR) exchange rate might have weakened to 1.35 this week, but the Pound Sterling to US Dollar (GBP/USD) currency pair was able to rally back toward technical support of 1.50 following a less-than-spectacular US employment report.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: Euro Gains as Greece Says it Won’t Default on Its IMF Payment
Over the course of the week the Pound Sterling to Euro (GBP/EUR) exchange rate peaked at a high of 1.3842 before sliding to a low of 1.3571.
While UK data, including the nation’s consumer confidence and Construction PMI, topped forecasts, Sterling faltered as the Euro was supported by easing ‘Grexit’ concerns.
Before the Easter Bank Holiday, Greece presented its creditors with a list of reform proposals. The plans are currently under consideration, and some industry experts are taking the fact that the measures weren’t dismissed out of hand to be a positive sign.
Further Euro gains followed the announcement that Greece will be meeting its upcoming debt obligations.
Although the Hellenic nation is fast running out of funds, alternate Finance Minister Dimitris Mardas asserted that Greece won’t default on its next payment to the International Monetary Fund (IMF).
He stated; ‘The country will pay the IMF on April 9. There’s money there for payment of salaries, pensions and whatever else is needed for all of next week. That doesn’t mean that there isn’t for the week after. This is a political decision that will be taken, and we will follow whichever political decision.’
IMF Managing Director Christine Lagarde and Greek Finance Minister Yanis Varoufakis met in Washington on Sunday to discuss the situation.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Surges after Disappointing US Non-Farm Payrolls
The Pound might have been underperforming against the Euro at the close of last week, but the British currency rallied against the US Dollar following the publication of the latest batch of US employment figures.
It had been hoped that the highly-influential US Non-Farm Payrolls report would show a solid jobs gain and support the case in favour of the Federal Reserve increasing interest rates in June. However, the world’s largest economy added considerably fewer positions than anticipated – causing industry experts to push back their rate hike expectations.
The US participation rate fell and the nation added 126,000 jobs in March rather than the 245,000 expected, resulting in an unchanged unemployment rate of 5.5%.
The level of joblessness had been forecast to remain at that figure, but the sub-200,000 jobs gain was disappointing,
As stated by Bloomberg; ‘To be sure, this will give the Fed less confidence that the economy is ready to endure the policy liftoff as early as June, and it will bring into question the degree to which the economy will spring-back in the current quarter following near 1% growth in the first quarter.’
The report saw the Pound Sterling to US Dollar (GBP/USD) exchange rate advance from a low of 1.4749 to a high of 1.4934.
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast – UK Services PMI, FOMC Minutes Ahead
In the week ahead, investors with an interest in the Pound Sterling to Euro (GBP/EUR) exchange rate will be focusing on the Greek bailout negotiations, but there are a number of reports with the potential to initiate further Sterling movement.
The UK’s Services PMI and the Bank of England’s latest interest rate announcement will be of particular note.
In reference to the Pound Sterling to US Dollar (GBP/USD) exchange rate, the data to focus on is the publication of minutes from last Federal Open Market Committee (FOMC) policy gathering.
While hawkish minutes are unlikely to give the US Dollar much respite given Friday’s jobs report, dovish minutes could help the Pound advance above the 1.50 level.
On Sunday the Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3559 while the Pound Sterling to US Dollar (GBP/USD) exchange rate was trading in the region of 1.4918