UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.3% on Wednesday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate gained by around 0.4%.
As traders prepare for the publication of minutes from the most recent Bank of England (BoE) monetary policy meeting, the Pound strengthened versus its major peers. Given the recent hawkish sentiment from BoE policymakers, most analysts expect the minutes to please rate hawks. There is also the possibility that one or more of the nine policymakers dissented and argued for an immediate rate hike.
The shared currency is holding relatively steady versus most of its currency competitors on Wednesday morning as Greek MPs prepare to vote on the second package of reforms required for unlocking the third-package of financial aid. Meanwhile, the US Dollar edged lower versus many of its currency rivals as traders await housing data due for publication later on Wednesday afternoon.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4263.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5617.
Yesterday…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Trend within a Narrow Range as Tensions in Greece Ease
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a limited range on Tuesday morning.
British economic data produced varied results on Tuesday. One particularly positive result was government borrowing, however, which was over £6 billion lower than at this time last year. Howard Archer, economist at IHS Global Insight stated that Chancellor George Osborne is likely to be very pleased with the public finance numbers. ‘Improved income tax receipts continue to underpin the improvement in the public finances, reflecting a pick-up in earnings growth as well as higher employment. However, June’s increase of 2.5% year-on-year in income tax related payments was less than the recent increases,’ stated Archer.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4347.
Now that tensions in Greece have eased to a large extent, thanks to Athens paying off arrears due to the International Monetary Fund (IMF), the shared currency strengthened versus many of its currency rivals. However, many analysts predict that the Euro will return to bearish trade as the European Central Bank (ECB) is adamant that the full program of quantitative easing should continue to the end.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4336 to 1.4391 during Tuesday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Trend within a Tight Range despite Cooling Safe-Haven Demand
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a limited range on Tuesday morning.
In response to Tuesday’s British ecostats, Samuel Tombs, senior UK economist at Capital Economics stated; ‘June’s poor borrowing figure means that borrowing in the first three months of the fiscal year of £25.1bn was £31.3bn (20%) lower than last year. If this trend persists over the remaining nine months of the fiscal year, this year’s deficit would be £71.5bn, £2bn higher than the OBR forecast in the Summer Budget. However, estimates for borrowing in the first few months of the fiscal year should be taken with a pinch of salt, given that they are based on more forecast data than those for later months. Accordingly, we do not think that June’s borrowing figures should ring any alarm bells yet.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5556.
Despite the fact that demand for safe-haven assets has cooled amid easing tensions in Europe, the US Dollar is holding a position of strength versus many of its peers. This is due to increasing rate hike rhetoric as futures traders bring forward bets as to the timing of a Federal Reserve benchmark interest rate hike. In addition, falling gold prices are supporting demand for the ‘Greenback’ (USD). With an absence of influential domestic data to provoke changes, the US asset is likely to continue holding steady for the remainder of Tuesday’s European session.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5550 to 1.5591 during Tuesday’s European session.