UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate ticked lower by around -0.25% on Tuesday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a tight range.
The British Pound edged lower versus most of its major peers as traders await June’s Consumer Price Index. Many analysts predict that the UK will once again fall into deflationary territory which has seen dampened demand for the British asset ahead of the publication.
The shared currency ticked higher versus its currency rivals after having declined significantly on Monday. Although the situation in Greece is far from resolved, with Greek Prime Minister Alexis Tsipras facing mutiny from his own party, the Euro strengthened as traders feared Monday’s depreciation was overdone.
The US Dollar, meanwhile, declined versus many of its rivals on Tuesday despite heightened demand for safe-haven assets. The US Dollar depreciation can be linked to speculation that June’s Advance Retail Sales will print poorly.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4062.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5460.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Hovers around 1.40, Will Syriza Accept Deal?
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 1.01% on Monday afternoon.
After a generally bearish week for the British asset, the Pound Sterling edged higher versus many of its currency rivals on Monday. The appreciation is mostly the result of easing tensions in Europe with the chances of Greece staying in the Eurozone dramatically heightened. A Grexit could have had a significant impact on the Pound given that the Eurozone is Britain’s largest trading partner. The Pound’s appreciation has been somewhat sluggish, however, given that the Greek deal is particularly vague at this moment. With little known as to the details of the Greek bailout plan, there are mounting uncertainties that the left-leaning Syriza party will accept the deal. What’s more, the new measures are likely to be harsher than those rejected by the people in the recent referendum.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4045.
The shared currency, meanwhile, is holding relatively steady versus its major peers. A slight depreciation can be attributed to the vagueness of the Greek deal. There are still so many hurdles to jump that traders are showing reluctance to react to news that Greece will not exit the Eurozone. As well as having to convince his own party and his citizens that the deal is worth taking, Greek Prime Minister Alexis Tsipras will also have to await news from Germany. German officials have shown increased reluctance to address any kind of debt restructuring, so the new deal may not prevent a Grexit at all.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3884 to 1.4067 today.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Edge Higher on BoE Credit Conditions Survey
The Pound Sterling to US Dollar (GBP/USD) exchange rate gained by around 0.30% on Monday afternoon.
The Bank of England Credit Conditions & Bank Liabilities Surveys showed demand for mortgages advanced considerably in the second-quarter. In addition, the survey showed both small and large businesses saw heightened demand for loans. The general improvement of credit conditions is due mainly to the combination of accelerated wage growth coupled with ultra-low interest rates.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5558.
The US Dollar is holding gains after rallying on Sunday as a result of hawkish sentiment from Byron Wien, vice chairman of the advisory services unit at Blackstone Group LP. Wien stated that a strengthening US economy could prompt the Federal Open Market Committee (FOMC) to hike the lending rate as soon as September. ‘I think the economy is going to do much better in the second half, and I think the Fed is dying to go,’ Wien said on the television program ‘Wall Street Week’ on Sunday. Despite the hawkish comments from Wien, US Dollar gains have tailed off somewhat. This is due to ongoing concerns regarding US Dollar overvaluation and recent warnings from the International Monetary Fund (IMF) that an early rate hike could be damaging to the economy.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5491 to 1.5589.