UPDATE
As traders await British inflation data, the Pound is generally holding steady versus its major peers. August’s Consumer Price Index is tipped to drop from 0.1% to 0.0%, but some analysts have predicted a drop into negative inflation. Should consumer prices drop the Pound is likely to decline given that the lack of inflationary pressure is likely to delay a Bank of England (BoE) rate hike.
The German ZEW Economic Sentiment Survey is likely to provoke Euro volatility later during Tuesday’s European session. With the situation in China having a detrimental impact on German exports, many economists predict that economic sentiment in the currency bloc’s most powerful nation will drop.
Although trader focus is dominated by Thursday’s Federal Reserve interest rate decision, today’s US data is also likely to be impactful. August’s Advance Retail Sales is expected to come in at 0.3%; just half the sales growth seen previously. A poor result could weigh heavily on the US Dollar as any weak data will weigh on Federal Open Market Committee (FOMC) decisions.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3662.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5435.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Conversion Rate Predicted to Edge Higher despite Eurozone Industrial Production
The Pound Sterling to Euro (GBP/EUR) exchange rate ticked higher by around 0.2% on Monday afternoon.
In the immediate aftermath of the Labour Party leader election, which saw the Euro-sceptic left-winger Jeremy Corbyn gain victory, the Pound dived versus its major peers. Trader fears that a Labour victory in the next general election could prompt an immediate exit from the European Union weighed on Sterling. However, the British asset advanced over the following days amid speculation that the depreciation was overdone. With a complete absence of domestic data to provoke changes, the Pound is likely to hold gains versus most of its major peers during Monday’s European session.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3638.
After data out of China confirmed fears that the world’s second-largest economy is slowing, demand for safe-haven assets surged. Of particular disappointment was Industrial Production which came in well below expected growth in August. The shared currency appreciated in response to trader risk-aversion. However, gains were short-lived as traders fear that the common currency is overvalued. Even a positive result from Eurozone Industrial productipon wasn’t enough to provoke a significant Euro appreciation.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3578 to 1.3650 during Monday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Hold Gains amid Fed Rate Hike Uncertainty
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a tight range on Monday afternoon.
In addition to concerns that the recent Sterling depreciation was overdone, the Pound advanced on Monday thanks to the UK’s minimal ties to China. With Bank of England (BoE) officials already making assurances that the situation in China is not likely to impact UK interest rate policy at the moment, the Pound has taken on some of its own safe-haven credentials. However, with mounting uncertainty regarding the extent of the fallout from China’s economic woes there are fewer places to hide for traders wanting to store cash. Many fear that even the indirect consequences of China’s slowdown will have a significant impact on those assets not closely tied to the world’s second-largest economy.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5416.
With a complete absence of domestic data to provoke volatility, the US Dollar edged lower versus many of its currency rivals. The slight depreciation can be linked to speculation that headwinds from China will prevent the Federal Reserve hiking the cash rate on Thursday. Trader focus is likely to be dominated by the Federal Open Market Committee (FOMC) decision in the days ahead, although Tuesday’s US Advance Retail Sales and Wednesday’s Consumer Price Index may also have a significant impact on US Dollar volatility.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5431 to 1.5471 during Monday’s European session.
