The British Pound to Euro (GBP/EUR), British Pound to US Dollar (GBP/USD) and British Pound to Swiss Franc (GBP/CHF) exchange rates began Wednesday’s trading trending in a narrow range before the Bank of England (BoE) releases its meeting minutes and UK Unemployment Rate data emerged.
Earlier… The British Pound to Euro (GBP/EUR), British Pound to US Dollar (GBP/USD) and British Pound to Swiss Franc (GBP/CHF) exchange rates all fell in the first half of Tuesday’s session as investor sentiment waned on account of the UK general election.
Update: Germany’s ZEW Economic Sentiment Survey reached 54.8 in March from 53.0.
Earlier… The British Pound to Euro (GBP/EUR) exchange rate sank in the second half of Monday’s trading while the British Pound to US Dollar (GBP/USD) and British Pound to Swiss Franc (GBP/CHF) exchange rates climbed on weaker-than-forecast US Industrial and Manufacturing Production, as well as a slip in the NAHB Housing Market Index.
The NAHB Housing Market Index was forecast to climb from 55 to 56 in March; however, the actual ecostat fell to 53.
Meanwhile, US Manufacturing Production failed to record growth, instead contracting by -0.2%.
Earlier… The British Pound to Euro (GBP/EUR), British Pound to US Dollar (GBP/USD) and British Pound to Swiss Franc (GBP/CHF) exchange rates all recorded gains in Monday’s European session despite a fall in UK Rightmove House Prices.
The March Index recorded 1.0% growth after February’s 2.1% gain, which pulled the annual figure down from 6.6% to 5.4%.
The upcoming UK general election is expected to cause the UK economic recovery to falter as citizen’s’ confidence wanes amid the prospect of a political shakeup. The Rightmove House Price figure is thought to have fallen as a result of the upcoming election.
Rightmove Director Miles Shipside commented: ‘This month fits the consistent pattern of ebbs and flows in many different localities within the overall London market, with prices still going up in some better-value boroughs and still going down in others that have overshot.’
Meanwhile, the Euro could be influenced by the European Central Bank (ECB) on Monday. ECB President Mario Draghi is expected to announce the central bank’s latest quantitative easing (QE) purchases, followed by a press conference.
However, the ECB has seen some Eurozone citizens take to the streets to protest against the central banking institution and its austerity policies—a very prominent topic at the moment amid negotiations between Greece and its creditors.
One of the main protest organisers, Ulrich Wilken, commented: ‘The main reason for the protest is that the ECB is in the troika and the troika is responsible for the austerity policies that have pushed so many into poverty.’
‘They are not democratically elected, yet they push governments into taking action all the time. We saw this again in the manner in which they made the terms harsher for Greece to get finance after the election.’
US Dollar to British Pound (USD/GBP) Exchange Rate Awaiting FOMC Announcement
The US Dollar will also be influenced by central bank actions this week, with the Federal Open Market Committee (FOMC) expected to announce its latest interest rate decision on Wednesday. In addition, Federal Reserve Chairwoman Janet Yellen will hold a press conference shortly after the announcement which could impact the US Dollar to British Pound (USD/GBP) exchange rate further.
The US Dollar exchange rate has been trending higher in recent weeks, with many forecasting a prolonged period of strength ahead as investors’ price in US interest rate hikes. Despite, the Federal Reserve stating that interest rates will remain at the current 0.25% benchmark for the next several meetings, speculation for earlier rate hikes has seen the US Dollar soar.
However, Reserve Bank of Australia (RBA) Assistant Governor Guy Debelle announced that investors should listen to the Fed which has not significantly changed its language toward borrowing costs for the past six months.
Debelle commented: ‘Whether people listen to that is up to them. All I would say is that I’d probably listen to the people that actually have control over what they’re actually going to do, and hear what they’re saying, based on expectations around that.’
US Industrial Production, Manufacturing Production and the NAHB Housing Price Index is scheduled for release later in Monday’s session and could influence the US Dollar to British Pound (USD/GBP) exchange rate significantly.
Meanwhile, the Swiss Franc to British Pound (CHF/GBP) exchange rate softened on Monday as a result of a larger-than-forecast fall in Swiss Retail Sales and Producer Price Indexes. Swiss Retail Sales contracted by -2.1% in January after December’s +1.0% growth; economists had forecast a smaller slip of -1.1%.
The annual Swiss Retail Sales figure then dropped from +2.2% to -0.3% which is likely to cause weaker sentiment in the nation’s economic recovery.
The annual Swiss Producer Price Index (PPI) also slipped from -2.7% to -3.6% in February—the lowest since November 2009. This week will see the Swiss National Bank (SNB) hold a policy meeting and weaker producer prices may keep the central bank from introducing more monetary stimulus after recently dropping interest rates to -0.75%.
British Pound Exchange Rate Forecast: GBP/EUR, GBP/USD, GBP/CHF
The British Pound to Euro (GBP/EUR), British Pound to US Dollar (GBP/USD) and British Pound to Swiss Franc (GBP/CHF) exchange rates may all fluctuate this week when the Bank of England (BoE) releases its latest meeting minutes on Wednesday.
In addition, the UK Unemployment Rate is forecast to fall on Wednesday from 5.7% to 5.6%, an event that could enable the British Pound to rally.
The British Pound to US Dollar (GBP/USD) exchange rate is trading at 1.4784. The British Pound to Swiss Franc (GBP/CHF) exchange rate is reaching 1.4842. The British Pound to Euro (GBP/EUR) exchange rate is trending in the region of 1.4033.