UPDATE
As traders await British Retail Sales, the Pound is generally holding steady versus most of its currency rivals. A positive result will fuel speculation of a sooner-than-anticipated Bank of England (BoE) rate hike which should see the British asset rally versus its major peers.
The Euro, meanwhile, is trading statically versus its major rivals on Thursday morning despite the fact that Greece has finally secured financial aid. The muted response to the news is likely to be the result of traders having expected Euro-area nations to approve the terms of the deal. In addition, trader focus has now shifted to Greece’s political struggles and the potential for snap elections.
Federal Open Market Committee (FOMC) minutes showed that policymakers still feel there is much improvement to be made before considering a benchmark rate hike. This all but quashed hopes of a September liftoff, and the US asset has seen subdued trade in response.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4090.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5661.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate ticked lower by around -0.1% on Wednesday afternoon, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a limited range.
Given the lack of domestic data to provoke changes, the Pound is trading relatively statically versus its major peers. A slight downtrend can be linked to traders buying profits after Tuesday’s upsurge opened up some attractive selling positions.
After German MPs voted to accept the terms for Greece’s third bailout deal, the Euro edged higher versus its major peers. The appreciation was somewhat sluggish, however, given that most analysts expected the Germans to agree to the terms.
US Inflation matched economists’ forecasts on Wednesday afternoon as consumption edged higher. The data has had minimal impact on the Dollar, however, with traders looking towards the Federal Open Market Committee (FOMC) minutes due for publication later in the North-American session.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4184.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5662.
Earlier…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Edge Lower despite Hawkish Miles Comments
The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.2% on Wednesday morning.
With a complete absence of domestic data to provoke volatility, the Pound ticked lower versus many of its currency rivals. The depreciation is likely the result of traders adjusting positions following Tuesday’s upswing. The UK’s surprise rise in inflation caused the Pound to rally versus all of its major peers. This, in turn, allowed traders to buy profits after the surge opened up some attractive selling positions.
Monetary Policy Committee (MPC) member David Miles stated that rates would rise ‘pretty soon’. ‘Within the UK economy consumer confidence is strong, corporate confidence is pretty strong and the financial system is operating near normal now,’ he stated. However, the hawkish comments had minimal impact on the Pound because Miles will be leaving the MPC before the next vote on interest rates is cast. Most traders remain confident that Bank of England (BoE) officials will hold the cash rate into the first half of 2016 to give inflation a chance to grow.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4177.
As German MPs gather to vote on the terms for Greece’s latest bailout package, the common currency edged higher versus its major peers. This is likely to be the result of trader confidence that Germany will accept the terms. However, German Chancellor Angela Merkel will probably need to combat dissent in her own party, with many outspoken MPs questioning the validity of any Eurozone bailouts. Certainly the prospect of a Greek debt haircut looks to be pie in the sky for the Hellenic nation with Germany’s finance minister Wolfgang Schäuble reiterating the fact that it would be contrary to European law.
Thus far, European economic data has printed positively, which has aided the common currency appreciation. June’s non-seasonally adjusted Eurozone Current Account advanced from 4.3 billion to 31.1 billion. Additionally, the seasonally adjusted figure rose from 19.1 billion to 25.4 billion.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4155 to 1.4202 during the early stages of Wednesday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Edge Higher ahead of US Inflation Data, FOMC Minutes
The Pound Sterling to US Dollar (GBP/USD) exchange rate ticked higher by around 0.2% on Wednesday morning after hitting a 50-day high on Tuesday.
Thursday will be of interest to those invested in the British Pound with Retail Sales data due for publication. A positive result could reinvigorate rate hawks determined to see the BoE hike the benchmark interest rate before the close of the year. Friday could also see heightened Sterling volatility with Central Government NCR, Public Sector Net Borrowing, PSNB ex Banking Groups and Public Finances data due for publication.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5682.
After Tuesday’s domestic data showed US Building Permits plummeted in July and Housing Starts failed to meet with the market consensus, the US Dollar has been dragging its heels against most of its major peers. Wednesday has seen the US asset continue to edge lower as traders await Consumer Prices data due for publication later on Wednesday. Although US inflation is forecast to edge higher, the varied nature of recent ecostats has caused traders to show increased reluctance to invest ahead of the results.
In addition to the inflation data, the Federal Reserve will publish minutes from the most recent policy meeting. Trader opinion as to how the minutes will read is significantly divided. A hawkish tone is likely to send the US asset surging versus its major peers, especially given easing concerns regarding China’s economic slowdown and positive developments with the Hellenic nation.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5658 to 1.5697 during the early stages of Wednesday’s European session.