UK Retail Sales Fall, GBP/EUR, GBP/USD Rates Decline
Sterling softened against a number of its currency counterparts during the European session as UK retail sales were shown to have fallen by -0.2% on the month rather than rising the projected 0.4%,
This resulted in a lower-than-anticipated annual figure.
Eurozone and US and reports could trigger further GBP/EUR, GBP/USD fluctuations.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.4117
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending in the region of 1.5605
Newsflash: GBP/EUR Exchange Rate Falls Back to 1.42 as Greek MPs Approve Reforms, UK Retail Sales Ahead
After advancing close to an eight-year high of 1.44 on Wednesday, the Pound Sterling to Euro (GBP/EUR) exchange rate fell back to the 1.42 level on the news that Greek MPs voted in favour of the latest tranche of reform measures demanded by creditors.
However, Sterling could recoup losses later today if the UK’s retail sales report comes in at or above forecasts.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4286
If one or more members of the Bank of England (BoE) vote to increase interest rates at the August gathering, as many industry experts now believe will be the case, the Pound Sterling to Euro (GBP/EUR) exchange rate could move beyond recent 8-year highs of 1.44.
Pound Sterling to Euro (GBP/EUR) Exchange Rate News: Osborne’s 2015 Spending Cut Plans Drive Pound Lower before BoE Minutes
The Pound Sterling to Euro (GBP/EUR) exchange rate closed out last week trending in the region of 1.44 – its highest level since before the global financial crash.
However, the pairing shed some of its recent gains and returned to trading at around the 1.42 level at the beginning of this week as spending cuts outlined by the Chancellor of the Exchequer inspired concern for the UK’s continued economic recovery.
Fears that the plans to implement 20 billion Pounds worth of spending cuts would temporarily derail growth and push back BoE interest rate hike projections drove the British asset lower against a number of its peers on Tuesday.
Pound Advances after BoE Minutes Suggest Split Vote on Interest Rates in August, GBP/EUR, GBP/USD, GBP/AUD Exchange Rates Gain
The Pound’s bullish run resumed on Wednesday after the BoE published minutes from its latest policy meeting, at which interest rates were left on hold and the level of asset purchases remained unchanged.
Although the minutes showed that the nine-member Monetary Policy Committee (MPC) was in complete agreement regarding the need to hold borrowing costs at record lows, it was implied that the vote would have been split were it not for Grexit concerns.
According to industry expert Enrique Díaz-Alvarez; ‘Now that Greece is fading from the headlines, we would expect at least two dissenters [from holding rates] at the next meeting and a slow build-up towards a majority for a hike by February 2016.’
In the wake of the minute’s publication the Pound Sterling to Euro (GBP/EUR), Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Australian Dollar (GBP/AUD) exchange rates all registered notable gains, with the GBP/EUR pairing rising above 1.43 to approach the 1.44 level.
Increasing interest rate hike speculation is likely to continue driving the Pound higher against its most-traded currency counterparts in the short to medium term.
That being said, the BoE minutes did highlight some worries over the domestic currency’s recent uptrend.
As observed by The Wall Street Journal; ‘Anticipation of a rate increase, spurred by comments from policy makers including BOE Governor Mark Carney, saw Sterling rise 3.8% against the euro last week, to its highest since October 2007. On a trade-weighted basis, the currency has appreciated 6% year-to-date and 2% since the BOE’s July meeting. While that is good news for Britons heading on vacation to Europe, it is a headache for the BOE’s policy makers: it may weigh on inflation, which dipped back to zero in June, and could cause problems for exporters.’
Euro to Pound Sterling (EUR/GBP), US Dollar (EUR/USD) Exchange Rates Fluctuate as Greek MPs Vote on Reform Measures
While the Pound was riding high off the back of the prospect of higher UK borrowing costs, the Euro came under pressure from, you guessed it, Greece.
The headlines relating to the Hellenic nation might not be half as dire as they were just two short weeks ago, but Greece is far from out of the woods following six months of worsening fiscal conditions and socioeconomic uncertainty.
On Wednesday Greek MPs gathered in order to vote on two of the policy adjustments deemed essential by the nation’s creditors.
Although the Euro was lent some support later in the local session as the European Central Bank (ECB) increased liquidity to Greek banks, with the cap on emergency aid being raised to 900 million Euros, renewed protests over planned austerity measures took the shine off he development.
Until Greece is actually granted its third bailout and a semblance of normality returns to that particular quadrant of the Eurozone, the Euro will remain subject to shifting sentiment.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: UK Retail Sales, Eurozone Confidence Data Predicted to Impact Currency Market Movement Today
In the hours ahead the Pound Sterling to Euro (GBP/EUR) exchange rate could easily return to its eight-year and 2015 best rate of 1.44 if the UK’s retail sales report supports sooner-rather-than-later BoE interest rate hike expectations.
Retail sales growth is believed to have improved from 0.2% month-on-month to 0.4% in June, with annual sales advancing from 4.4% to 5.1%.
Should the data meet with or exceed these expectations, Sterling gains are likely.
The only ecostat from the Eurozone worth noting is the region’s Consumer Confidence Index for July. Economists have forecast that the sentiment gauge slipped from -5.6 to -5.8 this month. Given recent events, a dip in confidence would hardly be surprising but the report is still unlikely to lend the Euro much support.
On Wednesday the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4303.