Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Edge Lower Even after Dovish Draghi Speech
The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.2% on Thursday afternoon.
After rising British house prices stoked fears of a London housing bubble the Pound Sterling fluctuated versus its major peers. October’s RICS House Price Balance came in at 49%; eclipsing the median market forecast 45% growth. Many industry experts now fear that the overwhelming gulf between supply and demand will price out first-time buyers. With an absence of further domestic data to provoke changes, the British asset is likely to continue trending narrowly against the Euro and hold losses against the US Dollar for the remainder of Thursday’s European session.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4119.
Fears that the latest political developments in Portugal, combined with ongoing tensions in Greece, will see a long period of geopolitical uncertainty weighed on demand for the Euro today. Further dampening sentiment was a speech from European Central Bank (ECB) President Mario Draghi who parroted earlier dovishness by questioning the long-term sustainability of Euro-area price pressures without extending the asset-purchase program. What’s more, Portugal’s debt may be declassified which would limit the assets available for the ECB to purchase.
Pound Sterling to US Dollar (GBP/USD) Conversion Rate Predicted to Trned Narrowly on Euro Weakness
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a tight range on Thursday afternoon.
In response to the RICS UK House Price Balance, Simon Rubinsohn, RICS chief economist, said; ‘The legacy of the drop in new builds following the onset of the global financial crisis is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month by month basis. Property is set to become more unaffordable going forward, based on five-year projections from RICS’ members for house prices and rent.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5209.
Despite the fact that US economic data produced disappointing results thus far on Thursday, the US Dollar is holding gains versus most of its currency peers. The appreciation can be linked to Euro weakness as the prospect of anti-austerity campaigns in Europe dominates investor focus. Both Continuing Claims and Initial Jobless Claims failed to meet with expectations. With several speeches from Federal Reserve officials still to come, however, there is the potential for US Dollar volatility as the North American session progresses.
Pound Sterling Forecast: Subdued Trade Likely as European Geopolitics Dominates Trader Focus
Given that the situation in Greece and Portugal is at the forefront of investor focus currently, there is the potential that the Pound will see subdued trade tomorrow. With that being said, however, there is the chance for changes to occur following the publication of September’s UK Construction Output data.
In terms of the GBP/EUR exchange rate, German and Eurozone Gross Domestic Product data will be significant. For those invested in the US Dollar: Advance Retail Sales and University of Michigan Confidence reports will provoke volatility.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4114 to 1.4203.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5171 to 1.5247 during Thursday’s European session.
