Newsflash – Pound Slightly Softer as Queen’s Speech offers no Referendum Direction
After the Queen’s speech offered up no hints as to when the UK’s in/out EU referendum might be held, the Pound registered declines against the majority of its peers.
The prospect of drawn out economic uncertainty saw Sterling fall over 0.3% against the Euro, US Dollar and New Zealand Dollar.
The GBP/USD exchange rate continued trending in a softer position even after the US MBA Mortgage Applications report registered a -1.6% decline.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4089
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5342
Newsflash – German Confidence Improves, GBP/EUR Posts Modest Declines
The Pound Sterling to Euro (GBP/EUR) exchange rate edged slightly lower on Wednesday following the release of the German GfK Consumer Confidence Survey for June.
Although economists had forecast that the index would print at 10.0 (down from 10.1 the previous month) it actually came in at 10.2.
Meanwhile, the Pound Sterling to US Dollar (GBP/USD) exchange rate gained following comments issued by Federal Reserve Vice Chairman Stanley Fischer.
Fischer stated that the Fed will be taking global growth into their considerations when deciding the path of interest rates and will slow increases if the world economy isn’t performing as well as hoped.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4119
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5417
Pound Softens as Greek Contagion Risks Downplayed, US Data Impresses
Sterling softened against both the Euro and US Dollar as trading continued on Tuesday and officials attempted to downplay the potential backlash of a Greek exit from the Eurozone.
Bank of France Governor Christian Noyer was one of the officials stating that he doesn’t believe Greece leaving the Eurozone would pose any significant risks to banks and insurers.
Meanwhile, the US Dollar extended earlier gains against its British peer as US Durable Goods Orders came in -0.5% in April, as expected, while March’s figure was positively revised to an increase of 5.1%.
Durable Goods Excluding Transportation were also up 0.5% rather than the 0.3% forecast.
Later the US Consumer Confidence Index surged from 94.3 to 95.4, smashing expectations for a figure of 95.0.
Markit’s US Services/Composite PMI’s weren’t as impressive however, with both moving closer to the 50 mark separating growth from contraction.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.4098
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trading in the region of 1.4101
GBP/EUR, GBP/USD Little Changed after CBI Data
The Pound experienced only minimal movement following the publication of the Confederation of British Industry’s (CBI) Reported Sales figure.
The retail sales balance surged from +12 in April to +51 in May, smashing expectations for a reading of +17.
CBI Economics Director Rain Newton-Smith said of the result; ‘Low inflation, which we expect to remain below 1% for the rest of the year, has given household incomes a much-needed boost and greater spending power.’
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.4122
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5408
As markets reopened following the bank holiday weekend, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.41 while the Pound Sterling to US Dollar (GBP/USD) exchange rate slumped back to 1.54 – however, this week’s UK growth data could see the Pound gain on both the common currency and the ‘Greenback’.
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate News: Euro Undermined by Greek Bailout Concerns, Federal Reserve 2015 Rate Hike Comments Boost US Dollar
At the close of last week the Pound Sterling to Euro (GBP/EUR) exchange rate remained trending in the region of a two-month high as hopes for an imminent agreement being reached between Greece and its creditors were dashed by International Monetary Fund (IMF) chief Christine Lagarde.
Lagarde stated; ‘I know there is a lot of work to be done. Parties are now working, receiving proposals, working in cooperation and we will continue to do so as fast as we can. It has to be a comprehensive approach, not a quick and dirty job.’
A modest dip in the German IFO Business Climate and Expectations gauges also weighed on demand for the Euro, although the fall in the business climate measure wasn’t as steep as forecast.
The Pound, meanwhile, continued to enjoy support following the publication of impressive UK retail sales data – although signs that Prime Minister David Cameron will push for a ‘Brexit’ (British exit from the European Union) if the EU doesn’t make some concessions, did see Sterling slide against some of the majors.
‘Cable’ softened on Friday and fell back to trending in the 1.54 region after assurances from the Federal Reserve that US interest rates will be increased this year bolstered demand for the US Dollar.
Fed Chairwoman Janet Yellen stated; ‘If the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalising monetary policy.’
The -0.2% annual inflation figure for the US had comparatively little impact on the GBP/USD exchange rate as the result had already been priced into the market to a certain extent and the US Core Consumer Price Index held at 1.8%.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast – Greek Negotiations Continue, German Confidence and Retail Sales Data Ahead
A dearth of economic news for the currency bloc could limit Pound Sterling to Euro (GBP/EUR) exchange rate movement today, although investors will be taking a keen interest in the situation in Greece.
The talks between Greece and its creditors are set to continue, but with the Hellenic nation’s Finance Minister blaming an insistence on greater austerity measures for the delay, it’s doubtful much progress will be made.
Any news, either positive or negative, could have a notable impact on GBP/EUR trading.
Over the rest of the week the main Eurozone data to be aware of includes Germany’s GfK Consumer Confidence Index and German Retail Sales numbers.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4137
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast – US Durable Goods Orders, Consumer Confidence Reports Could See ‘Cable’ Advance Today
As this week’s major US reports are expected to disappoint, the Pound Sterling to US Dollar (GBP/USD) exchange rate could gain over the next couple of days.
Today’s US Durable Goods Orders figure is predicted to show a -0.5% decline in April following a positively revised 4.7% increase in March.
This report will be followed by the US Consumer Confidence measure for May. The sentiment index for the world’s largest economy is forecast to have edged from 95.2 to 95.0.
Markit’s US Services and Composite PMI’s will also be of interest. As the US economy is driven by the services sector, a dip in the former measure may drive the ‘Greenback’ lower by the middle of the week.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a high of 1.5588
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: UK and US Growth Data Could See Sterling Advance on Euro and Trend above 1.55 against the ‘Greenback’
The start of the week may be fairly quiet in terms of influential ecostats for the UK or Eurozone, but there will be GDP reports published in the days ahead which could help the Pound advance on both the Euro and US Dollar.
The UK is set to publish first quarter growth numbers on Thursday and economists believe the quarter-on-quarter figure could be positively revised from 0.3% to 0.4%.
This would result in an upward revision to the annualised data, taking year-on-year growth in the first three months of the year to 2.5% from 2.4%.
Although the pace of growth would still be markedly slower than in the fourth quarter of 2014, a positive alteration would put the UK on the same footing as the Eurozone and well above the US and potentially trigger renewed demand for the Pound.
Meanwhile, the US first quarter growth data (due out on Friday) is forecast to undergo a negative revision, with the annualised figure dropping from 0.2% to -0.9%.
Despite the fact that the Federal Reserve has expressed confidence that the US will rebound following the first quarter slowdown, such a result would still weigh on the US Dollar.
That being said, if the US University of Michigan Confidence Index shows the improvement expected, ‘Greenback’ losses may be limited.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7073, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5398, the US Dollar to Pound Sterling (USD/GBP) exchange rate was trading in the region of 0.6494, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4134