UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.54% on Wednesday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate declined by around -0.30%.
After a report from Recruitment and Employment Confederation (REC) and accountants KPMG showed the pace of UK hiring slowed to a near two-year low in June, the Pound softened versus its major peers. The depreciation was aided by futures traders delaying bets as to the timing of a Bank of England (BoE) rate hike after manufacturing data showed weakness in response to Sterling overvaluation.
The common currency, meanwhile, edged higher versus most of its major rivals after Greece were given until Sunday to secure a deal for bailout. This gives more time to solidify the reform proposal which has traders optimistic that a deal can be done. However, should Greece fail to secure aid by Sunday the European Central Bank (ECB) will have no choice but to withdraw liquidity assistance for Greek banks.
The US Dollar strengthened versus its competitors thanks to demand for safe-haven assets. The Federal Reserve will release minutes from the June 16th-17th policy meeting, in which many traders expect Chair Janet Yellen and policymakers to have a hawkish outlook. However, the International Monetary Fund (IMF) have once again warned against an early rate hike.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3961.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5438.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Edge Lower ahead of UK GDP Estimate
The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.13% on Tuesday afternoon.
Thus far during Tuesday’s European session, the Pound has fluctuated after domestic data produced mixed results. May’s Industrial Production bettered estimates, but May’s Manufacturing Production failed to meet with expectations. Analyst Dominic Bryant from BNP Paribas said the data was ‘mixed’ overall as manufacturing output disappointed: ‘Q2 looks set to be the strongest quarter for industrial production since at least Q4 2010, but with manufacturing production possibly its weakest since 2012. Robust industrial production to date in Q2 is consistent with overall GDP growth picking up from its lacklustre 0.4% q/q registered in Q1.’
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4098.
The Euro, meanwhile, is holding relatively steady as traders await news from the Eurogroup meeting scheduled for later on Tuesday. The meeting will see European officials discussing Greece. The officials have called for Greece to submit a fresh reform proposal in time to discuss during the meeting. Athens announced today that they will extend the bank holiday until Wednesday, with no sign of capital controls lifting. With time running out before Greek banks collapse, a failed attempt at securing bailout funds today could see a forced Greek exit from the Eurozone.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4099 to 1.4150.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Decline ahead of US Trade Balance
The Pound Sterling to US Dollar (GBP/USD) exchange rate dived by around -0.90% on Tuesday afternoon.
The NIESR Gross Domestic Product Estimate for June, due for publication later on Tuesday afternoon, has the potential to provoke Sterling volatility. The previous figure came in at 0.6%. Rate hawks will be looking for as many positive results from domestic data as possible ahead of the Bank of England (BoE) interest rate decision on Thursday. Although most economists expect the Monetary Policy Committee (MPC) to hold rates at this juncture, there is the potential for some policymakers to dissent from Governor Mark Carney’s policy outlook.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5457.
Despite the fact that the US Non-Manufacturing Composite failed to meet with expectations on Monday, the ‘Greenback’ (USD) gained versus its major peers and continues that trend on Tuesday. The appreciation is the direct result of traders flocking to safe-haven assets amid turmoil in Europe. US Trade Balance and Consumer Credit data had minimal impact on the US Dollar with market sentiment dominating trade.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5485 – 1.5610.
