UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.25% on Friday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate gained by around 0.35%.
After Bank of England (BoE) Governor Mark Carney stated that a benchmark interest rate hike is likely to occur at the turn of the year, the Pound rallied versus its major rivals. With an absence of domestic data to curb the trend on Friday, the Pound is likely to hold a position of strength over the course of the European session.
The shared currency edged lower versus many of its currency competitors as German MPs prepare to vote on the terms of the third Greek bailout deal. Although most analysts predict that the deal will be passed, there could be dissent in the German government with MPs so divided over the decision.
The US Dollar, meanwhile, declined versus most of its major rivals on Friday morning. This is likely to be the result of trader profit-buying after Thursday’s surge opened some attractive selling positions. The US Consumer Price Index, due for publication later on Friday afternoon, has the potential to provoke US Dollar volatility.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4386.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5664.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Reaches 7-Year High as Split Greek Government Threatens Snap Election
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.19% on Thursday afternoon.
Despite the fact that British labour market data printed poorly on Wednesday, the Pound strengthened versus its currency rivals on Thursday morning. This was due to fears that the depreciation on Wednesday was overdone when you consider wage growth accelerated at the fastest pace in over five years. In addition, whilst the rise in unemployment was disappointment, joblessness is still hovering around a 6-year low.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4306.
The shared currency, meanwhile, dived versus most of its currency competitors in response to political upheaval in Greece. Whilst Prime Minister Alexis Tsipras managed to get the latest bailout deal accepted by his government, many Syriza party members voted against the deal. This will likely result in a complete cabinet reshuffle. Given that Tsipras has, to a large extent, lost favour with his own party there is also a possible snap election on the cards. Unsurprisingly, many anti-austerity protestors rioted in Athens after the Syriza government acted at complete odds with their political mandate. In addition, uncertainties are still plaguing Euro investment with Germany yet to vote on whether to accept the terms for Greece’s third bailout deal.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4279 to 1.4346 during Thursday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Decline on US Employment Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.15% on Thursday afternoon.
The British economic calendar is completely absent of data for the remainder of this week. Therefore, movement will be subject to changes in the currency market. The situation in Greece is likely to have an impact on the British asset. Ongoing and drawn-out negotiations cause uncertainties within Europe which could impact on demand for British exports. In addition, the strength of the Pound against the single currency could stymie British exports.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5601.
After Federal Reserve Chairwoman Janet Yellen stated that a 2015 rate hike was still definitely on the cards, the US Dollar advanced versus its peers. Thursday’s European session has seen the US Dollar hold advance versus its major peers as a result of the combination of positive data results and safe-haven demand. Both Initial Jobless Claims and Continuing Claims declined beyond expectations supporting rate hawks betting on a 2015 Fed benchmark rate hike.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5557 to 1.5650 during Thursday’s European session.
