UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4373, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5569.
As traders await British finance data, the Pound is trending statically versus the majority of its most traded currency peers. The shared currency has also settled as fears regarding Greece have eased and traders look towards monetary policy as a driver for Euro movement. The US Dollar, meanwhile, is holding a position of strength as gold prices continue to fall.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Soften after Greek Banks Reopen
The Pound Sterling to Euro (GBP/EUR) exchange rate declined by around -0.41% on Monday afternoon.
In response to mixed results from domestic data, the Pound edged lower versus many of its currency rivals during Monday’s European session. July’s Rightmove House Prices increased by 5.1% on the year; bettering the previous figure of 4.5%. On the month, however, July’s Rightmove House Prices came in at 0.1% growth; significantly lower than the previous 3.0% growth. Also weighing on demand for the British asset is fears of overvaluation. After a succession of positive ecostats and hawkish sentiment from Bank of England (BoE) officials last week, the Pound rallied significantly versus its major peers which caused many futures traders to fear that overvaluation would hinder a BoE rate hike.
Another headwind causing Sterling depreciation was news that Barclays will be cutting jobs in London.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4344.
The shared currency strengthened during Monday’s European session thanks to news that Greek banks have reopened after a three-week unscheduled holiday. Capital controls remain in place however, with Greek citizens only able to withdraw €420 per week. Additional common currency appreciation is the result of Athens having used the $7 billion bridge loan to pay the European Central Bank (ECB) $3.5 billion bond repayment, plus $700 million in interest. Also, it has been reported that the Greek government settled the arrears owed to the International Monetary Fund (IMF).
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading within the range of 1.4331 to 1.4410 during Monday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Edge Lower on Gold Prices
The Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.29% on Monday afternoon.
In response to the UK House Prices data, Rightmove echoed an earlier report by the Royal Institution of Chartered Surveyors (RICS), stating that there was a sharp drop in the number of homes for sale. ‘The number of properties coming to market is running at a weekly run-rate 10.6% below the same period in 2014. The biggest drop-off in fresh supply is in the typical first-time buyer sector with two bedrooms or fewer. The shortage of suitable property for sale highlights the need for an urgent and marked increase in the overall housing stock to help keep pace with the growth in household formation.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5555.
Despite easing concerns over Greece causing dampened demand for safe-haven assets, the US Dollar strengthened versus many of its major peers. Given that the Federal Open Market Committee (FOMC) suggested that the situation in Greece could delay a cash rate hike, demand for the Dollar heightened when it became clear that Greece would remain in the Eurozone. Additional US Dollar gains can be attributed to falling gold prices.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5535 to 1.5628 during Monday’s European session.
