NEWSFLASH – UK Sentiment Eases, Pound Softens
The Pound Sterling to Euro (GBP/EUR) exchange rate fell to a low of 1.3931 on Friday as investors digested the news that the UK’s GfK Consumer Confidence Index fell from +4 to +1 in May, despite forecasts for no change.
GBP/EUR fluctuations also occurred as German retail sales were shown to have risen by more-than-expected on the month in April but were up less on the year.
NEWSFLASH – UK GDP Falls Short, Pound Sterling Holds Declines
Economists had expected final first quarter GDP data for the UK to be positively revised on both a quarterly and annual basis.
However, the growth data was unchanged, holding at 0.3% on the quarter (instead of rising to 0.4% as anticipated) and 2.4% on the year (versus the 2.5% projection).
After the report was published the Pound continued trending over 0.6% lower against the Euro and remained at 1.53 against the US Dollar.
Meanwhile, the Eurozone published a mixed bag of sentiment data.
Although the region’s Business Climate Indicator and Consumer Confidence Index came in below forecast levels, the Eurozone’s Economic, Industrial and Services Confidence measures showed improvement in May.
Tomorrow’s German retail sales figures are likely to cause additional GBP/EUR movement.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3992
After trending close to its highest levels of 2015 on Wednesday, the Pound Sterling to Euro (GBP/EUR) exchange rate dropped to 1.4042 ahead of the release of the UK’s first quarter growth data as investors digested the content of the Queen’s speech and Greece claimed a bailout deal was imminent.
Pound Sterling to Euro Exchange Rate News – Queen’s Speech and EU Referendum Weigh on Pound, Euro Supported by German Confidence Data and Greek Bailout Forecast
The Pound Sterling to Euro (GBP/EUR) exchange rate was holding close to a 2 ½ month high (and almost its strongest level of 2015 so far) ahead of the Queen’s Speech on Wednesday.
Although an unexpectedly strong German Consumer Confidence Index lent the Euro a little support as the European session progressed, concerns relating to Greece potentially defaulting on its next debt repayment to the International Monetary Fund (IMF) prevented the Euro from posting any significant gains.
However, as the Queen’s Speech failed to provide any fresh details on the timing of the promised in/out EU referendum, the thought of more than 12 months of uncertainty pushed the Pound lower before the close of trade.
The GBP/EUR currency pair also softened in response to comments from Greece.
Greek PM Alexis Tsipras claimed that the nation is close to reaching an accord with its creditors and that the details of the long awaited bailout deal will be presented soon.
These remarks triggered a spike in Euro sentiment and the common currency held gains despite EU officials stating that a deal was still a long way off.
European Commission Vice President Valdis Dombrovskis said of the assertion; ‘We are working very intensively to ensure a staff-level agreement. We are still not there yet.’
The Pound Sterling to Euro (GBP/EUR) exchange rate achieved a high of 1.4087
Euro to Pound Sterling Exchange Rate Forecast – EUR/GBP Holds Gain as German Import Price Index Shows Improvement, Eurozone Confidence Data Ahead
The Euro’s uptrend against the Pound was also supported by Germany’s Import Price Index, published early in the European session.
Import prices were shown to have risen by 0.6% on the month in April (beating forecasts for a 0.5% rise) which resulted in a slightly better-than-anticipated annual reading of -0.6%.
Although the conflicting Greek commentary is likely to continue acting as a major headwind to Euro gains, if today’s Eurozone Economic/Industrial/Services/Consumer Confidence indexes show improvement, the Euro to Pound Sterling (EUR/GBP) exchange rate may cling to its modest advance in the hours ahead.
The Euro to Pound Sterling (EUR/GBP) exchange rate hit a low of 0.7096
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Recoup Losses if UK GDP is Positively Revised, US Employment Data Ahead
Bets that the Federal Reserve will increase borrowing costs sometime in 2015 continue to support the US Dollar and the Pound Sterling to US Dollar (GBP/USD) exchange rate dropped to a 20-day low on Wednesday.
While today’s UK growth figures could help the Pound recoup some of its losses against the ‘Greenback’, the US Dollar’s bullishness could continue if today’s Initial Jobless/Continuing Claims reports show a decrease in the number of people applying for unemployment benefits in the US.
Currently investors are expecting the number of people applying for first time benefits to come down from 274K to 270K, with the amount of individuals continuing to claim benefits dipping from 2211K to 2200K.
US Pending Home Sales data will also be of interest.
The Pound Sterling to US Dollar (GBP/USD) exchange rate fell to a low of 1.5337
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast – UK Confidence, House Price Data & German Retail Sales Report to Impact Sterling Trading Before the Weekend
At the close of the week a final bout of Pound Sterling to Euro (GBP/EUR) exchange rate movement could occur in response to the UK’s GfK Consumer Confidence index.
The sentiment gauge is expected to hold at 4 but a surprise improvement in sentiment would be Sterling supportive.
UK House Price figures will also be of interest, as will the Lloyds Business Barometer.
Investors with an interest in the GBP/EUR exchange rate will also be focusing on Germany’s Retail Sales report. A strong increase in consumer spending in the Eurozone’s largest economy could bolster the Euro.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5373, the US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.9141, the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7114 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4057.