Pound Sterling to US Dollar (GBP/USD) Bullish Before Payrolls Numbers
In the wake of the Bank of England’s inflation report, the Pound Sterling to Euro (GBP/EUR) exchange rate dropped from 1.40 to 1.38.
The central bank opted to cut its growth projections for both this year and next, making a positive rate revision before the middle of next year unlikely.
However, the GBP/USD exchange rate was able to recover from a brief dip as the less-than-impressive US retail sales report reduced demand for the ‘Greenback’.
Today’s US initial jobless/continuing claims figures could have an impact on ‘Cable’ trading in the hours ahead.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trading in the region of 1.5761
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3822
Newsflash: GBP/EUR Recovers Losses as UK Data Beats Forecasts
Although the Pound Sterling to Euro (GBP/EUR) exchange rate remained down on the day’s opening levels, the pairing was able to recoup some of its earlier losses following the release of the UK’s Industrial/Manufacturing Production data and return to trending around 1.39.
The GBP/EUR exchange rate was supported as both Industrial and Manufacturing Production were shown to have increased by more-than-expected on the month – indicating that the UK economy is performing well.
Economist Howard Archer said of the result; ‘Now that the general election is out of the way and political uncertainty is less of a factor, the prospects for manufacturers seem pretty healthy on the domestic demand front, especially for consumer goods. Meanwhile, the underlying fundamentals for business investment still seem decent overall, which will hopefully support demand for capital goods, especially now that the risk of political uncertainty and instability has essentially disappeared for the time being following the Conservative’s gaining of a majority in the general election.’
The UK’s latest GDP data also showed a slightly improved pace of expansion in the three months to April, with growth up from 0.3% to 0.4%.
The GBP/USD exchange rate was trading in the region of 1.5683 – up 0.6% on the day.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Falters as UK EU Referendum Brought Forward, UK Production Data Ahead
After rising above 1.40 in response to concerns Greece would default on its debt repayment to the International Monetary Fund (IMF), the GBP/EUR exchange rate softened back to 1.38 as the Hellenic nation opted to make the payment early.
The uptrend in the Pound Sterling to Euro currency pair was also undermined by reports that Prime Minister David Cameron intends to bring forward the promised referendum on UK membership in the European Union.
Although the GBP/USD exchange rate continued trending above 1.55, the pairing did dip from the 2015 highs recorded on Monday.
Later today both the GBP/EUR and GBP/USD exchange rates could experience movement as the UK publishes Industrial and Manufacturing Production data.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3873
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trading in the region of 1.5576
The Pound Sterling to Euro (GBP/EUR) exchange rate briefly rose above 1.40 on Monday on the threat of a Greek default, while the Pound Sterling to US Dollar (GBP/USD) exchange rate rallied to 1.56 amid hopes of a positive inflation report from the Bank of England (BoE).
Pound Sterling to Euro and Pound Sterling to US Dollar Exchange Rate News: GBP/EUR, GBP/USD Extend UK General Election Gains as the Week Begins
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed for a third day on Monday as the surprise outcome to the 2015 UK general election continued to lend the Pound support.
Meanwhile, the Pound Sterling to US Dollar (GBP/USD) exchange rate finally managed to breach the 1.56 level ahead of the release of this week’s US retail sales data.
While the Bank of England’s Interest Rate Decision, which saw the central bank leave fiscal policy unchanged, had little impact on the Pound, the prospect of a positive inflation report from the central bank helped Sterling continue its uptrend.
In the view of industry expert Harry Adams; ‘The Pound is still unwinding the covering from the potential risk of last week. It is back to business for the UK now and so with the lift of uncertainty the Pound could be catapulted.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: Greek Uncertainty Weighs on Euro despite Payment to IMF, Sterling Unmoved by BoE Decision
Another day of failed discussions among Eurozone officials in Brussels saw the Pound Sterling to Euro (GBP/EUR) exchange rate bounce above 1.40 on Monday.
Although ecostats for both the Eurozone and UK were in short supply, the Pound capitalised on UK election-based gains and extended its advance against the common currency.
With a massive debt repayment to the International Monetary Fund (IMF) looming, some industry experts had hoped that Greece would come a step closer to reaching a bailout agreement with its creditors.
However, it appeared that neither side was satisfied by the turn the gathering took and the Euro remained under pressure even as Greece paid the IMF the 750 million Euros owed early.
The move prompted these remarks from The Guardian; ‘Greek finance ministry officials confirmed that the general state accountancy office had been instructed to make the IMF transaction with immediate effect. Athens had not been expected to meet the debt obligation until Tuesday, had previously asked the fund for a delay, and had set rumours circulating on Sunday that it would stall on the payment.’
‘With both sides now locked in a pattern of contrasting narratives and spin, Athens and the Eurozone appeared to be talking past one another. There was no sign of the Europeans softening the conditions for disbursing the money and just as little evidence of Athens coming up with detailed plans that would satisfy its lenders.’
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast – Slide in US Unemployment Doesn’t Stop ‘Cable’ Achieving 1.56
While the situation in Greece and the introduction of additional stimulus measures in China inspired a risk-off environment which boosted the US Dollar, the GBP/USD exchange rate still pushed higher on Monday.
The Pound Sterling to US Dollar (GBP/USD) exchange rate jumped above 1.56 before the close of the European session – the pairing’s strongest level of 2015 so far.
Friday’s US Non-Farm Payrolls report and decline in unemployment had previously knocked the Pound back below 1.55, but nothing could stop Sterling’s surge on Monday.
The US Labour Market Conditions Index came in at -1.9 in April, down from -1.8 in March, but the data had relatively little impact on the ‘Greenback’.
Pound Sterling to Euro and Pound Sterling to US Dollar Exchange Rate Forecast – GBP/EUR May Surge if Grexit Concerns Rise, GBP/USD Movement Likely on UK Production Data
In the days ahead the GBP/EUR pairing could achieve 1.41 if Greece’s debt repayment fails to progress the bailout negotiations – a development which would substantially increase the odds of a ‘Grexit’ occurring.
Both the GBP/EUR and GBP/USD exchange rates are also likely to fluctuate in response to the UK’s latest Industrial Production and Manufacturing Production figures.
While the Industrial and Manufacturing Production reports will have an impact, investors will also be looking ahead to Wednesday and the publication of the BoE’s inflation report.
As stated by MarketWatch; ‘The central bank will on Wednesday publish its latest forecasts for the U.K. economy in its quarterly inflation report. Economic growth was weaker than expected in the first quarter, up just 0.3% from the previous quarter, and annual inflation has slowed to zero following a slump in the oil price. But economists say they expect the central bank will signal Wednesday that it expects both growth and inflation to accelerate in the second half of the year. Investors expect the BOE to begin slowly raising its benchmark interest rate early next year.’
If the BoE does indeed adopt a hawkish tone with regards to expansion and consumer prices, the uptrend in both the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates could continue.
Conversely, words of caution from the BoE would weigh on the Pound over the second half of the week.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3983, the Euro to Pound Sterling exchange rate was trading at 0.7153, the US Dollar to Pound Sterling (USD/GBP) exchange rate was trading in the region of 0.6414 and the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5606.