UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.3% on Thursday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a limited range.
The British Pound edged higher versus most of its currency peers on Thursday morning despite a complete absence of domestic data to provoke volatility. A slight appreciation can be linked to the news that the number of people in the UK being declared insolvent dropped to its lowest level for nearly a decade.
The shared currency weakened against its currency rivals on Thursday as Greek Prime Minister Alexis Tsipras continues to lose support from his own party members. A growing number of analysts expect Tsipras to call a snap election. The result of which could see another dramatic policy change in such a short period of time, and prolonged uncertainty is something Athens cannot afford.
As most had expected, the Federal Reserve opted to hold the benchmark interest rate at this juncture. The accompanying statement was somewhat lacklustre, however. Whilst praising the jobs market and sighting further improvements to come, officials barely addressed the lack of inflationary pressures or the potential fallout from China’s economic slowdown. Some rate hawks now see a greater likelihood that the Fed will liftoff in September, but the generally vague statements have others delaying bets.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4230.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5602.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Tick Higher as Greek Bailout Talks Continue
The Pound Sterling to Euro (GBP/EUR) exchange rate edged higher by around 0.5% on Wednesday afternoon.
After British economic data produced better-than-expected results, the Pound strengthened versus many of its currency rivals. June’s Net Lending Securities on Dwellings came in at 2.6 billion; bettering the median market forecast drop from 2.4 billion to 2.0 billion. June’s Net Consumer Credit also beat the market consensus of 1.1 billion with the actual result reaching 1.2 billion. In addition, June’s Mortgage Approvals came in at 66,600 – eclipsing economists’ forecast of 66,000 approvals.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4168.
The shared currency, meanwhile, is holding comparatively steady versus its currency rivals as traders await news regarding ongoing negotiations between Greek officials and creditors. German Consumer Confidence for August managed to hold in line with economists’ forecasts, but the result had minimal impact on Euro movement with trader focus dominated by developments in Greece. Many analysts predict that the Euro will devalue in the long run as European Central Bank (ECB) monetary policy outlook is some way behind that of its major counterparts.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4081 to 1.4178 during Wednesday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Advance ahead of Federal Reserve Rate Decision
The Pound Sterling to US Dollar (GBP/USD) exchange rate strengthened by around 0.2% on Wednesday afternoon.
In response to the British Mortgage Approvals data, Reuters journalist Andy Bruce stated; ‘There have been signs that the housing market is heating up again. Mortgage approvals have risen in most months this year and the pace of price rises has started to pick up. Net mortgage lending, which lags approvals, rose 2.615 billion Pounds in June, the biggest increase since July 2008 and comfortably beating a Reuters poll consensus of 2.05 billion Pounds.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5643.
The US Dollar is unlikely to post any significant gains during Wednesday’s European session as traders await the Federal Open Market Committee (FOMC) interest rate decision. Although most analysts agree that the Fed will not hike the cash rate at this juncture, there is the potential for hawkish sentiment in the accompanying statements from Fed officials. However, the lack of inflationary pressures as a result of commodity bearishness and the difficulties regarding China’s equity market may ease pressure on the FOMC to adjust policy.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5583 to 1.5649 during Wednesday’s European session.