The US Dollar to Euro (USD/EUR) and US Dollar to Pound Sterling (USD/GBP) exchange rates could be in for some massive market movement in next week’s trading with the Bank of England (BoE) meeting minutes, US Federal Open Market Committee (FOMC) rate decision and European Central Bank (ECB) economic bulletin all due to occur.
US Dollar to Pound Sterling (USD/GBP) Exchange Rate Climbs Despite Upbeat UK Rightmove House Prices Data- UK Inflation (CPI) Ahead
Monday began with the US Dollar to Pound Sterling (USD/GBP) and US Dollar to Euro (USD/EUR) exchange rates trending higher, despite a rise in UK Rightmove House Prices. The annual ecostat rose from 2.5% to 4.5% in June after the month itself registered 3.0% gains.
Tuesday will be a big day for the GBP exchange rate with the UK Consumer Price Index due for release. After last month’s fall in inflation, the Pound Sterling (GBP) will be sensitive to any additional softening; however, economists are rather upbeat that a rise will occur.
Pound Sterling to US Dollar (GBP/USD), Euro (GBP/EUR) Exchange Rate Forecast: BoE Policymaker Divergence Predicted to cause GBP/USD Rally
The Pound Sterling to US Dollar (GBP/USD) exchange rate could experience some major movement on several days next week, starting with Tuesday’s UK Consumer Price Index (CPI). The April UK CPI reading slipped into deflation at -0.1%, while the Core CPI fell to 0.8%. Any further falls in inflation could see the Pound Sterling (GBP) exchange rate sink rather dramatically.
Meanwhile, Wednesday’s labour market data could also see the GBP/USD and GBP/EUR exchange rates swing. UK Employment Change and Unemployment Rate figures are likely to cause some massive Pound Sterling (GBP) movement, but as if that wasn’t enough, the British currency will also impacted by the Bank of England’s meeting minutes.
If a divergence among policymakers occurred in the June interest rate decision, the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates could rally.
Euro to US Dollar (EUR/USD), Pound Sterling (EUR/GBP) Exchange Rate Forecast: Greece Poses Threat to Common Currency Strength
Tuesday’s German ZEW Economic Sentiment and German Current Situation Surveys are forecast to cause some major movement in the Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates next week. However, with the situation in Greece so uncertain ahead of the June 18th Eurogroup meeting, the Euro (EUR) exchange rate is likely to be sensitive to any developments between the nation and its creditors.
On Monday talks broke down between Greece and its creditors as they hit loggerheads over pensions and VAT.
— Peter Spiegel (@SpiegelPeter) June 15, 2015
European Central Bank (ECB) President Mario Draghi also spoke on Monday and was quizzed about progress in Greece.
Draghi: In case of default, "we will enter into uncharttered waters, we have all the tools to manage the situation at best" #Greece
— Jorge Valero (@europressos) June 15, 2015
Additionally, Thursday will see the release of the ECB’s economic bulletin which could cause additional movement to the Euro (EUR), especially if any negative comments or mention of quantitative easing (QE) arises.
US Dollar to Pound Sterling (USD/GBP), Euro (USD/EUR) Exchange Rate Forecast: FOMC Rate Decision Ahead
Wednesday will be a particularly interesting day for the US Dollar to Pound Sterling (USD/GBP) exchange rate with the release of the FOMC’s latest rate decision. Thursday will be another day of interest for US Dollar traders with the release of the US Consumer Price Index. A climb in inflation would be likely to see investors price in better economic conditions for a Federal Reserve rate hike and the US Dollar (USD) exchange rate could rally.
On Friday, the US Dollar to Pound Sterling (USD/GBP) exchange rate was trending in the region of 0.6417.
Additionally, Thursday will see the release of the US Real Average Weekly Earnings stat which could cause some positive USD/EUR and USD/GBP movement if favourable.
US Leading Indicators and the Philadelphia Federal Reserve Manufacturing ecostat are also due out on Thursday and are forecast to cause some moderate market movement.
Federal Reserve officials are forecast to speak throughout the week and any hawkish statements could drive a US Dollar (USD) rally.
The US Dollar to Euro (USD/EUR) exchange rate was trending at 0.8871.