UK Data Disappoints, Pound Sterling Falls against Euro, US Dollar Today
The Pound Sterling to Euro and Pound Sterling to US Dollar exchange rates edged lower on Friday following the release of disappointing UK Construction Output data.
Output was down by -1.0% on the month in July, defying forecasts for a 0.5% gain. On the year output slid -0.7% rather than gaining the 0.9% expected.
The BoE’s inflation outlook for the next 12 months was also cut from 2.2% to 2.0%.
The GBP/EUR exchange rate was trending in the region of 1.3671
The GBP/USD exchange rate was trending in the region of 1.5433
BoE Interest Rate Vote Split 8-1, GBP/USD, GBP/EUR Hold Gains
Both the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates remained trending in a stronger position following the publication of the minutes from the latest Bank of England (BoE) policy meeting.
To the surprise of no-one, the central bank left borrowing costs on hold, with the vote remaining split 8-1.
However, policymakers did imply that the recent volatility in China haven’t substantially altered their timeline for increasing interest rates, which means a revision in the first quarter of 2016 could still be on the cards.
The minutes stated; ‘Although the downside risks emanating from overseas had risen, it would be premature to draw strong inferences from this month’s events for the likely path of [policy] activity.’
Sterling was accordingly little changed following the release, though if tomorrow’s BoE 12-month inflation projection is revised down the Pound could come under pressure.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3757
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trading in the region of 1.5391
Ahead of the Bank of England’s (BoE) interest rate decision, the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates advanced – however, the pairings could plummet if the BoE adopts a dovish tone later today.
Pound Sterling to Euro Exchange Rate Forecast: UK Industrial Production, GDP Data Cause GBP/EUR, GBP/USD Fluctuations
On Wednesday the British Pound experienced volatility as investors responded to less-than-impressive UK Manufacturing and Industrial Production figures.
The GBP/USD conversion rate moved away from 1.54 while the GBP/EUR pairing came under pressure as industrial production printed at -0.4% on the month (rather than 0.1%) and manufacturing production came in at -0.8% vs. predictions for a 0.2% increase.
The data saw industry expert Howard Archer remark; ‘The data highlight the limiting impact that weakened foreign demand is currently having on UK growth as total exports fell sharply in July… while manufacturing surveys have repeatedly cited the weakness of foreign orders.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Gains Limited by Greek Bailout News before 2015 Election
A quiet data week for the Eurozone saw investors return their gaze to Greece on Wednesday and consider the likely outcome of the nation’s second general election of 2015.
The Euro to Pound Sterling (EUR/GBP) exchange rate came under a little pressure as the day continued and Jean Claude-Junker, head of the European Commission, adopted a hard line stance when discussing the impact the upcoming Greek election is likely to have on the nation’s recently granted third bailout.
The EC President asserted; ‘It was important that [the Greeks] understood that they would not be saved at any cost. I want the programme to be respected by all future Greek governments. We are serious and for real. We need respect for arrangements that have been reached.’
The Euro to Pound Sterling (EUR/GBP) exchange rate fell to a low of 0.7262
US Dollar to Pound Sterling Exchange Rate Forecast – USD/GBP Volatility Predicted to be Limited Ahead of FOMC Meeting Next Week
The US Dollar to Pound Sterling (USD/GBP) exchange rate declined on Thursday despite BoE speculation as the UK’s RICS House Price Balance and Halifax House Price figures improved on forecasts.
The RICS House Price Balance figure came in at 53% in August, smashing forecasts for 46%.
Meanwhile, Halifax House Prices were up a seasonally adjusted 2.7% in August, month-on-month, rather than the 0.5% expected.
This led to an annual figure of 9.0% rather than 7.9%.
US data has either been in short supply or of low import this week, giving investors little to go on with regards to next week’s Federal Open Market Committee (FOMC) policy announcement.
While last Friday’s US unemployment slide was perceived as being supportive of a rate adjustment, many industry experts have expressed the opinion that domestic price pressures will have to increase before borrowing costs do.
Next week’s US Consumer Price Index will therefore be closely attended to. An uptick in inflation ahead of the FOMC gathering may trigger a ‘Greenback’ surge. As it stands, the dearth of data saw the US Dollar spend the first half of this week moving away from previous highs against peers like the Pound and South African Rand. While investors with an interest in ‘Cable’ will be focusing on the BoE interest rate announcement today, some GBP/USD fluctuations may be inspired by the US initial jobless and continuing claims figures and the nation’s Wholesale Inventories report.
The US Dollar to Pound Sterling (USD/GBP) exchange rate hit a low of 0.6493
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: BoE Interest Rate Announcement in Focus Today
The direction taken by the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates today will depend on the content of the Bank of England’s (BoE) policy meeting minutes.
If the minutes back up BoE Governor Mark Carney’s previous assertions that the central bank will move to increase interest rates around the turn of the year, the Pound could surge.
Conversely, dovish minutes are likely to send Sterling trending lower across the board.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7269, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5401, 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 1.3757