UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a limited range on Thursday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate edged higher by around 0.2%.
With sentiment towards the Bank of England (BoE) waning amid concerns the Fed rate hike delay will cause the British central bank to hold rates for longer, the Pound softened versus most of its major peers. BBA Loans for House Purchase, due for publication later on Thursday morning, has the potential to provoke changes for the British asset.
On Wednesday the shared currency rallied versus its major peers after European Central Bank (ECB) President Marion Draghi stated that the central bank was not looking to expand monetary stimulus at this time. Thursday has seen the common currency trending fractionally lower, however, after German Consumer Confidence failed to meet with expectations in October.
With US Durable Goods Orders data due for publication on Thursday afternoon, the US Dollar declined versus most of its major rivals. The depreciation can be linked to speculation that US Durable Goods Orders will show a significant contraction.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3623.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5272.
Yesterday…
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Soften ahead of US Mortgage Applications
The Pound Sterling to US Dollar (GBP/USD) exchange rate depreciated by around -0.8% on Wednesday afternoon.
After China’s manufacturing output fell deeper into contraction, the Shanghai Composite Index ended the Asian session nearly 2.2% down; erasing gains made in recent days. This caused dampened demand for the British asset after Chancellor George Osborne announced his intentions to merge the UK’s equity market with China’s. With such instability in the Far East nation, as highlighted by the slump in manufacturing activity and the volatility of the Shanghai Composite Index, many traders fear it is a bad move for the UK to have such increased exposure to the world’s second-largest economy.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5235.
As traders await US Mortgage Applications and Manufacturing PMI, the US Dollar is trending relatively statically versus most of its major peers. China’s economic slowdown is also having an impact on demand for the ‘Greenback’ (USD) as economists fear it will give the Federal Open Market Committee (FOMC) licence to continue to delay a monetary policy shift. With that being said, any positive data results will give rate hawks fuel to pressure the FOMC into hiking the benchmark interest rate within the next few policy meetings.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5219 to 1.5364 during Wednesday’s European session.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Predicted to Decline despite European Ecostats Missing Estimates
The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -1.1% on Wednesday afternoon.
Given the complete absence of British economic data today, the Pound is likely to continue holding a comparatively weak position for the remainder of Wednesday’s European session. However, there is the potential for volatility should there be any developments regarding George Osborne’s plans to merge the UK and China’s equity markets. Osborne has made reassurances that it will be positive in the long-run, but some experts believe that the Chancellor is just looking for contingency plans should the UK decide to leave the European Union in 2017.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3651.
German and Eurozone ecostats produced reasonably positive results on Wednesday, but most failed to meet with market expectations. The Eurozone Services PMI, Eurozone Composite PMI, German Services PMI and German Manufacturing PMI all posted growth but failed to meet with the respective median market forecast figures. The shared currency avoided depreciation, however, after China’s disappointing manufacturing output saw heightened demand for safe-haven assets.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3617 to 1.3819 during Wednesday’s European session.
British Pound (GBP) Exchange Rate Forecast to Hold Steady ahead of BBA Loans for House Purchase
Given the complete absence of British data on Wednesday and with no scheduled speeches from Bank of England (BoE) or Government officials, the Pound is likely to see subdued trade during Wednesday’s European session. Thursday’s BBA Loans for House Purchase is likely to provoke Sterling volatility.
