UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a limited range on Friday morning, whilst the Pound Sterling to US Dollar (GBP/USD) ticked higher.
After the Federal Open Market Committee (FOMC) opted to hold the cash rate, and the dovish accompanying speech from Federal Reserve Chair Janet Yellen warned of the risks from outside influences, the US Dollar softened versus its major peers. The Pound also struggled thanks to speculation that the Feds delay will be the Bank of England’s (BoE) delay. The common currency is holding comparatively steady amid concerns that the European Central Bank (ECB) will look to ease monetary policy in the near-term.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3635.
The Pound Sterling to US Dollar (GB/USD) exchange rate is currently trending in the region of 1.5580.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Conversion Rate Predicted to Edge Lower as Retail Sales including Auto Fuel Declines
The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.1% on Thursday afternoon.
The British Pound softened versus most of its major peers on Thursday morning after British Retail Sales equaled expectations of a growth slowdown in August. In addition, Retail Sales including Auto Fuel saw slower-than-anticipated growth. The UK asset is still holding a comparatively strong position versus its major peers, however, after yesterday’s British labour market data bettered estimates. Of particular significance was accelerated wage growth, which may pressure the Bank of England (BoE) into hiking the cash rate in the first half of 2016.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3720.
Despite an absence of critical domestic data and with market volatility subdued ahead of the Federal Open Market Committee (FOMC) interest rate decision, the shared currency ticked higher versus most of its major peers on Thursday morning. The appreciation is likely to be the result of traders expecting the Federal Reserve to hold the cash rate but talk up a December rate hike. That would delay the inevitable widening of policy divergence between the Fed and the European Central Bank (ECB).
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3657 to 1.3744 during the early stages of Thursday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Predicted to Hold Steady on Fed Rate Uncertainty
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a narrow range on Thursday afternoon.
The FOMC rate decision has significant ramifications for the currency market as a whole, such is the influence of the most advanced economy in the world. The Pound could see significant movement; the direction dependent on the outcome of the decision. If the Fed opt to hike the cash rate the Pound is likely to soften amid widening policy divergence and heightened demand for safe-haven assets. However, if the Fed chose to delay a hike but talk up the potential for a December rate increase in the accompanying press conference, the Pound is likely to rally as it would narrow the policy gap with BoE officials looking towards a second-quarter rate hike in 2016.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5511.
The US Dollar is likely to see sluggish trade during Thursday’s European session given that opinion is so divided as to how the FOMC will approach policy. With that being said, preceding US labour market data has the potential to provoke changes if the results are significantly different to median market projections.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5494 to 1.5548 during Thursday’s European session.
