Newsflash – US Manufacturing PMI Falls, GBP/USD Climbs
Before the close of the European session both the US and Eurozone published disappointing ecostats and the Pound was able to extend gains against both the Euro and US Dollar.
The GBP/EUR exchange rate advanced all the way to 1.4099 after the Eurozone’s Consumer Confidence index slid from -4.6 to -5.5 in May, a steeper drop than the expected decline to -4.8.
Meanwhile, the GBP/USD exchange rate briefly hit 1.57 after the US Markit Manufacturing PMI dropped from 54.1 to 53.8 in May. A reading of 54.5 had been forecast.
The number of people applying for first time unemployment benefits in the US was also higher-than-predicted, while Existing Home Sales fell by more-than-anticipated.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.4082
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trading in the region of 1.5673
Newsflash – UK Retail Sales Surge 1.2%, Pound Gains on US Dollar, Euro
The Pound extended gains against both the Euro and US Dollar as the European session progressed and the UK’s retail sales report showed surprising growth of 1.2%.
Reuters said of the report; ‘The strength of the figures may further ease concerns that a slowdown in Britain’s economy seen in the first quarter might be the start of a longer period of weakness. But the sharp increase in sales was due in large part to a possible one-off surge in purchases of clothing, textiles and footwear which jumped by 5.2% in April from March, the biggest monthly rise in four years.’
Both the GBP/EUR and GBP/USD exchange rates could experience movement later today as Bank of England (BoE) policymaker Martin Weale delivers a speech in London. Weale is known for his comparatively hawkish stance on interest rates so his comments could lend the Pound additional support.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4044
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5656
Newsflash – German and Eurozone PMI’s Disappoint, GBP/EUR Fluctuates before Retail Sales
Although the situation in Greece remains tenuous and the Eurozone’s Services and Composite PMI’s came in below expected levels, the Pound Sterling to Euro (GBP/EUR) exchange rate edged back below 1.40 on Thursday.
However, Sterling could push higher in the hours ahead if the UK’s retail sales report prints more strongly than expected.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3982
With Greece indicating that it will default on its next payment to the International Monetary Fund (IMF), the Pound Sterling to Euro (GBP/EUR) exchange rate rallied above 1.40, the GBP/USD exchange rate also climbed prior to the publication of the FOMC meeting minutes.
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate News: BoE Meeting Minutes Show Undivided Vote on Interest Rates, but Positive Commentary Boosts the Pound
Both the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates recorded gains after the minutes from the last Bank of England (BOE) policy meeting showed that policymakers believe UK economic slack to be almost completely eroded.
All nine members of the Monetary Policy Committee (MPC) might have supported keeping borrowing costs on hold for at least another month, but for two the decision remains ‘finely balanced’.
According to Brown Brothers Harriman Team analysts; ‘Bank of England minutes were released earlier and sounded somewhat hawkish. To us, this seemed in line with the BOE Quarterly Inflation report. But the market was probably caught off guard following the April CPI, which fell year-over-year for the first time since 1960. Even though inflation remains non-existent, wages are recovering, and there is a concern about pass-through inflation stemming from Sterling’s past depreciation. The minutes noted that slack should be fully absorbed within a year and that inflation weakness is likely to be temporary, set to pick up toward end-2015.’
Pound Sterling to Euro Exchange Rate Forecast – Greece Says it Will Default on June 5th Payment, Eurozone Construction Output Rises
The Euro fell against a number of its rivals on Wednesday after Greece warned that it won’t be meeting its next debt repayment to the International Monetary Fund (IMF) unless bailout funds are released.
The parliamentary speaker of the left-wing Syriza government, Nikos Filis, asserted; ‘Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5. If there is no deal by then that will address the current funding problem, they won’t get any money.’
The Pound Sterling to Euro (GBP/EUR) exchange rate hit a high of 1.4027
The cautionary remarks put the Euro under considerable pressure and the currency continued trending in a softer position despite Eurozone Construction Output rebounding by 0.8% on the month in March.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast – US Dollar Fluctuates as FOMC Policymakers Rule Out June Interest Rate Increase
The Pound Sterling to US Dollar (GBP/USD) exchange rate continued trending in the region of 1.55 as investors digested the latest batch of Federal Reserve meeting minutes.
The minutes contained both hawkish and dovish elements.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a high of 1.5588
While they acknowledged that the slowdown witnessed in the first quarter of the year was unlikely to persist, they also showed that most policymakers don’t envisage an interest rate adjustment taking place this summer.
The minutes showed that the majority of the FOMC; ‘thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising the target range for the federal funds rate had been satisfied.’
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: UK Retail Sales, Eurozone PMI and US Initial Jobless/Continuing Claims Figures Ahead
Tomorrow’s UK retail sales report could inspire Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rate movement. Retail sales are believed to have increased by 0.2% on the month in April and be up 3.7% on the year.
A better-than-expected increase in consumer spending would be Sterling supportive.
However, the direction taken by the GBP/EUR exchange rate may also depend on how well the Manufacturing, Services and Composite PMI’s for the Eurozone and its largest economies print.
Currently some of the measures are expected to show an easing in output – a circumstance which could pressure the Euro lower still.
Similarly, the direction ‘Cable’ takes on Thursday might be dictated by the US Initial Jobless/Continuing Claims numbers and US Markit Manufacturing PMI. Positive US ecostats would bring forward Federal Reserve interest rate hike expectations and give the ‘Greenback’ a boost.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7182, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5567, the US Dollar to Pound Sterling (USD/GBP) exchange rate was trading in the region of 0.6422, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3917