While the Pound Sterling to Euro (GBP/EUR) exchange rate has seen a slight rise today, the Pound Sterling to US Dollar (GBP/USD) is down -0.3%. UK housing bubble fears have weakened Pound Sterling, while more positive US data is expected to be released in the run-up to the inexorable Fed rate hike in December.
GBP/EUR, GBP/USD Exchange Rate News: Pound Gains on Weak Euro Today Despite Housing Bubble Fears
Many UK experts are predicting a housing bubble, a forecast supported by today’s Rightmove House Prices index, which shows house prices are up 6.2% Year-on-Year (YoY). London already tops the UBS global real estate ‘Bubble Index’. This news has weighed heavily on Pound Sterling, which has lost ground against many of the major currencies.
Comments from former Business Secretary, Sir Vince Cable, made at the weekend come as a stark warning over the state of the UK economy. Dismissing the ‘cheery confidence’ of Chancellor George Osbourne, Sir Vince, who predicted the 2008 financial crash, wrote in an article for The Independent that the UK economy was far from recovering. Of particular concern to Sir Vince is that policymakers would not be able to use the same tools to rescue the flagging economy as they did last time, stating: ‘Having pushed monetary policy and public debt to the limits of what are regarded as sustainable levels there is no obvious place to go if we hit another recession.’
Pound Sterling is currently down -0.3% against the US Dollar, -0.4% against the Canadian Dollar (CAD) and -0.3% against the Australian Dollar (AUD). GBP is up against some currencies, rising 0.1% against the Euro, 0.2% against the New Zealand Dollar (NZD) and 0.4% against the Turkish Lira (TRY).
Euro Continues Downtrend in the Wake of Paris Attacks, US Dollar Bullish Due to Confidence in Fed Rate Hike
Horrific attacks in Paris on Friday shook the Eurozone and further compounded losses suffered by the Euro as Portuguese and Greek crises continue to weaken the common currency. EUR/GBP has fallen -0.3% to a low of 0.7028, while EUR/USD has slumped -0.5% to hit a low of 1.0698. Elsewhere the Euro has fallen -0.5% against the Swiss Franc (CHF), -0.8% against the Indian Rupee (INR) and -0.4% against the South African Rand (ZAR).
The Euro has experienced some gains, growing 0.3% against the Australian Dollar (AUD) and the New Zealand Dollar (NZD), which are also suffering from the strength of the US Dollar.
The US Dollar is performing strongly, with fears of overvaluation beginning to ease ahead of tomorrow’s data dump. Key among the releases will be the US Consumer Price Index, which is forecast to show 0.1% growth.
The US Dollar is experiencing 0.5% gains against the Euro and the Australian Dollar, 0.8% on the New Zealand Dollar and 0.3% against the Pound Sterling, the Japanese Yen (JPY) and the Poland Zloty (PLN). Against the other major currencies, the ‘Buck’ is experiencing little movement.
GBP, EUR, USD Exchange Rate Forecast: Inflation Could Strengthen Pound Sterling and US Dollar, Euro Depreciation to Continue?
Both the UK and the US Consumer Price Index are due out tomorrow, with the UK expected to continue -0.1% contraction and the US to post 0.1% growth. The UK Core Consumer Price Index is expected to remain at 1%. Positive news here could halt the depreciation currently experienced by Pound Sterling against many of the major currencies.
All eyes are likely to turn away from the Greek and Portuguese crises in the Eurozone tomorrow in order to focus on the US Consumer Price Index. This report is considered to be the final piece in the Fed’s rate hike puzzle and a positive result will all but guarantee a rise in December. A near-certain rate hike will see the ‘Greenback’s bullish charge continue.
GBP, EUR, USD Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4223, with the EUR/GBP exchange rate trending around 0.7028.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trading at around 1.5179, while the USD/GBP exchange rate is trending at 0.6567.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending around 1.0698, with the USD/EUR exchange rate trading at 0.9295.