UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.5% on Thursday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a limited range.
Having softened on Wednesday in response to less-than-ideal domestic labour data, the Pound recovered losses early on Thursday. The appreciation can be linked to fears that the depreciation was unjust given the backdrop of accelerated wage growth and increased production. July’s RICS House Price Balance came in at 44%; bettering the market projection of 42% and aiding the Sterling uptrend.
The common currency, meanwhile, softened versus many of its peers amid concern that the Greek bailout deal is significantly flawed. Many traders fear that the latest deal will only delay the inevitable return to Greek financial crises. German inflation data had minimal impact despite meeting with the median market forecast because the figures were finalised from previous estimates.
As traders await Advance Retail Sales, the US Dollar is generally holding steady versus its currency rivals. A slight appreciation can be linked to speculation that Wednesday’s downtrend was overdone. The rapidly declining Chinese Yuan stoked speculation that the Federal Reserve will delay a rate hike amid a global economic slowdown. The Yuan has settled on Thursday after panic selling eased.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4057.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Plunge as Greece moves Closer to Receiving Financial Aid
The Pound Sterling to Euro (GBP/EUR) exchange rate dived by around -1.1% on Wednesday afternoon.
British jobs data produced a largely negative set of results on Wednesday. This caused the Pound to soften versus many of its most traded currency rivals. Perhaps the most disappointing result was Average Weekly Earnings for the three months through June which came in at 2.4% on the year; missing the median market forecast 2.8%. Also of significant disappointment was unemployment, which increased by 25,000 between April and June.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3983.
Conversely, the common currency rallied irrespective of disappointing domestic data. June’s Eurozone Industrial Production came in at 1.2% on the year; missing the market projection of 1.7%. The Euro appreciation can be linked to easing concerns regarding Greece after Greek, Eurozone and creditor officials agreed upon the terms for the nation’s third bailout package. However, the deal is yet to be accepted by Greek MPs and many fear that the dissent amongst Syriza MPs may become infectious.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3943 to 1.4116 during Wednesday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Trend within a Limited Range despite Poor UK Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced by around 0.4% on Wednesday afternoon.
In response to the British labour market data, ONS statistician David Freeman said: ‘This is now the second consecutive time we’ve reported fewer people in work on the quarter. While it’s too early to conclude that the jobs market is levelling off, these figures certainly strengthen that possibility. Growth in pay, however, remains solid.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5578.
The US Dollar declined versus its major peers on Wednesday amid speculation that the rapid Yuan devaluation will delay a Federal Reserve benchmark interest rate hike. BNP Paribas have gone as far as to delay rate hike bets to March 2016. Also weighing on demand for the US asset was Mortgage Applications which showed growth of just 0.1% in the week ending August 7th; a much smaller growth in applications when compared to the previous week’s growth of 4.7%
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5531 to 1.5605 during Wednesday’s European session.