Pound Sterling to Euro (GBP/EUR) Conversion Rate Predicted to Trend Around 1.40 after Eurozone Investor Confidence Eclipses Expectations
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.2% on Monday afternoon.
With a complete absence of British economic data today the Pound has seen movement in response to general market volatility. Against the majority of its most traded currency competitors, the British asset is trending comparatively statically. A very slight lean towards appreciation can be linked to hopes that hawkish Federal Reserve policy predictions will buoy the Bank of England (BoE) into hiking the benchmark interest rate ahead of current expectations. However, last week’s particularly dovish BoE inflation report and growth outlook is likely to continue to weigh on sentiment.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4040.
Across the Channel, the single currency advanced on Monday morning thanks to US Dollar weakness. As the world’s most traded currency pairing, EUR/USD negative correlation has resulted in a Euro uptrend, albeit a fractional one. Aiding the appreciation was better-than-expected domestic data results. September’s German Trade Balance saw the surplus rise to 22.9 billion, well above expectations of a rise from 15.4 billion to 20.0 billion. In addition, Eurozone Investor Confidence bettered estimates in November with the actual result reaching 15.1. Euro gains are predicted to be comparatively short-lived, however, given the potential widening policy divergence between the Federal Reserve and the European Central Bank (ECB).
Pound Sterling to US Dollar (GBP/USD) Conversion Rate Predicted to Hold above 1.50 ahead of US Labour Market Conditions Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate edged higher by around 0.5% on Monday afternoon.
In response to the less-than-ideal BoE policy outlook highlighted last week, analysts at Barclays bank stated; ‘Our reading of the MPC’s analysis implies a modest risk that the Bank Rate stays at its effective lower bound for longer, should GBP appreciation pressures persist. We continue to expect only modest GBP outperformance versus the EUR and material GBPUSD depreciation in the coming quarters. We prefer to express this view against the USD and expect upticks to provide better levels to re-engage in short GBPUSD positions.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5125.
After having surged significantly following last Friday’s much better-than-anticipated US Non-Farm Payrolls data, the US Dollar cooled slightly on Monday morning. The depreciation can be linked to fears that US Dollar overvaluation will hinder domestic economic progress and therefore cause the Federal Open Market Committee (FOMC) to consider delaying a cash rate increase. However, if October’s Labour Market Conditions Index Change equals or betters estimates of a rise from 0 to 0.9, the US Dollar may resume bullish trade versus its closest rivals.
Pound Sterling (GBP) Forecast: Quiet Economic Docket to Subdue Volatility
This week’s British economic docket is comparatively sparse of significant ecostats with only Wednesday’s data likely to provoke marked volatility. However, Wednesday’s data will be of significance because it includes earnings reports. With the UK government trying to replace tax credits and other benefits with higher wages, the data will be of significance for Conservative party hopes for improved economic conditions. The absence of influential data during the rest of the week is likely to see subdued Sterling trade with changes coming in response to general market movement.
German and Eurozone Gross Domestic Product data is likely to provoke significant GBP/EUR movement, whilst US Advance Retail Sales and University of Michigan Confidence reports will be of interest to those trading the GBP/USD.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3966 to 1.4068.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5047 to 1.5128 during Monday’s European session.