The Pound Sterling to Euro (GBP/EUR) exchange rate was trending higher in Friday’s European trading before Eurozone Industrial Production data, while the Pound Sterling to US Dollar (GBP/USD) exchange rate remained in a tight range ahead of UK Construction Output and University of Michigan Consumer Confidence stats.
Earlier… The Pound Sterling to Euro (GBP/EUR) exchange rate was trending higher in the first half of Thursday’s European session after the RICS House Price Balance jumped to a nine-month high at 34% in May, a little shy of the 36% forecast. Meanwhile, the Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.30% as the Greenback’ recovered losses from Wednesday’s trading ahead of US Advance Retail Sales data.
UPDATE: The US Advance Retail Sales stat fell in line with economists’ forecasts at 1.2% in May.
— Peter Spiegel (@SpiegelPeter) June 11, 2015
Additionally, things began to heat up in Greece when the International Monetary Fund (IMF) withdrew its team of negotiators as a lack of progress had been made.
US Dollar (USD) Exchange Rate Forecast: US Advance Retail Sales could Spur USD/GBP, USD/EUR Rally
The US Dollar (USD) exchange rate could have a highly favourable day on Thursday if the US Advance Retail Sales stat prints in line with forecasts. The US Advance Retail Sales number is predicted to come in at 1.2% in the month of May after April’s flat 0.0%.
Any favourable US data can easily spur a rise in investor sentiment as economists’ price in the possibility of a US Federal Reserve interest rate hike. However, the possibility of higher interest rates in the US is likely to catalyse major market movement and ripple out to nations the world over.
World Bank Warns of Federal Reserve Rate Hike Impact – US Dollar (USD) Exchange Rate Forecast to Strengthen as September Approaches
The World Bank has issued warnings about the impact of a Federal Reserve rate hike as we approach September when many investors have forecast the Fed will begin to tighten.
World Bank economist Kaushik Basu commented: ‘We are advising nations, especially emerging economies, to fasten seat belts. If I were advising the US Fed, I would recommend that this happens next year instead of late this year.’
There have also been warnings from the International Monetary Fund (IMF), who suggested that the US should wait until next year before hiking interest rates as the effect on the global economy will be significant.
Additionally, Thursday will see the release of US Business Inventories data which is forecast to reach 0.2% in April following March’s 0.1%.
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trending in the region of 0 6468 with +0.25% market movement.
The US Dollar to Euro (USD/EUR) exchange rate is trending in the region of 0.8884 with +0.45% market movement.
Euro (EUR) Exchange Rate Forecast: EUR/USD, EUR/GBP to Fluctuate as Greek Negotiations Drag On
Meanwhile, the Euro (EUR) exchange rate is fluctuating largely on macroeconomic developments and the situation between Greece and its creditors. Eurozone data is thin on the ground toward the end of the week with only Eurozone Industrial Production due out on Friday.
However, there’s been some major speculation surrounding the ongoing Greek negotiations, with deadlines continually being pushed back. After many faux deadlines, June 5th’s IMF repayment was expected to be the make or break day for Greece; however, the nation opted to consolidate all its payments into one at the end of the month—despite the nation being on the brink of running out of funds.
That brought the deadline to June 30th and as a result talks have been heating up. However, Standard and Poor’s credit ratings agency have now suggested that Greece’s ‘real’ deadline will be July 20th.
Chief rating officer Moritz Kraemer commented: ‘The real deadline is in July when Greece must repay the money it owes to the ECB. If they miss that payment, my expectation is it would be impossible for the ECB to continue providing emergency liquidity to the Greek banking sector.’
The Greek nation recently got downgraded to CCC which places it just a couple of notches above default.
Optimism appears in #Greece talks — some officials see a good chance of a deal next week
— Jan Strupczewski (@reutersJanS) June 11, 2015
The Euro to US Dollar (EUR/USD) exchange rate is trending in the region of 1.1264 with -0.43% market movement.
The Euro to Pound Sterling (EUR/GBP) exchange rate is trending in the region of 0.7285 with -0.16% market movement.
Pound Sterling (GBP) Exchange Rate Forecast: UK Construction Output to Cause Moderate GBP/USD, GBP/EUR Movement
The Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Euro (GBP/EUR) exchange rates are forecast for an interesting day on Friday with the release of the UK’s Construction Output stat and US University of Michigan Confidence data.
The UK’s annual Construction Output is forecast to slip from 1.6% to only 0.5% in April with the month alone registering 0.1% growth.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending in the region of 1.5463 with -0.25% market movement.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3731 with +0.17% market movement.