NEWSFLASH – Pound Falters as Prospect of EU Referendum Takes a Toll
As the Queen’s speech failed to provide a potential timeline for the Conservative’s promised in/out referendum on EU membership, concerns related to the impact of long-term speculation saw the Pound drop over 0.3% against a number of its currency counterparts on Wednesday.
The Pound fell back below 1.41 against the Euro and 1.54 against the US Dollar.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4087
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5335
NEWSFLASH – GBP/EUR, GBP/USD Steady after German Confidence Data
On Wednesday the Pound Sterling to US Dollar (GBP/USD) exchange rate recouped some of its earlier losses after a Federal Reserve official asserted that the pace of US interest rate hikes could be revised if global growth is struggling.
The Pound Sterling to Euro (GBP/EUR) exchange rate, meanwhile, posted a modest loss following the release of Germany’s sentiment data.
The confidence measure had been expected to fall from 10.1 to 10.0 but it actually increased to 10.2.
With the economic calendar looking fairly sparse today, further GBP/EUR and GBP/USD movement may be limited.
The Pound Sterling to Euro (GBP/EUR) exchange rate managed to continue trending in the region of a two-month high on Tuesday but the Pound Sterling to US Dollar (GBP/USD) exchange rate fell as positive US data supported Federal Reserve rate hike bets.
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate News: Greek Default Debate Pressures Euro, US Confidence & Durable Goods Data Supports ‘Greenback’
The Pound to Euro (GBP/EUR) exchange rate remained trending above 1.41 for much of Tuesday as bets Greece will default on its upcoming debt repayment to the International Monetary Fund took a toll on demand for the common currency.
Although some unnamed officials did outline a way in which the Hellenic nation could repay its creditors without defaulting, the Greek Interior Minister asserted that a default is the most likely scenario.
Greece is due to pay 1.6 billion Euros to the IMF in June, but the nation claims it won’t be able to meet this obligation as well as pay out pensions and wages unless a bailout agreement is struck.
Interior Minister Nikos Voutsis commented; ‘The money won’t be given… It isn’t there to be given. […] We won’t accept blackmail that says it’s either liquidity with a memorandum or bankruptcy.’
However, with neither side appearing willing to concede on certain issues, the odds of an accord being reached in time seem slim.
With ecostats for the Eurozone in short supply on Tuesday, the Euro’s downtrend against peers like the Pound and US Dollar was largely due to these ongoing Greek concerns.
The Pound Sterling to US Dollar (GBP/USD) exchange rate, meanwhile, fell by around 0.4% on the day’s opening levels following the publication of positive US Durable Goods Orders and Consumer Confidence figures.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast – German Confidence Data Ahead
On Wednesday the main cause of Pound Sterling to Euro (GBP/EUR) exchange rate movement – outside of developments in the Greek situation – is likely to be the German GfK Consumer Confidence Index.
The sentiment gauge for June is expected to fall from 10.1 to 10.0 as a result of the political uncertainty inspired by Greece.
If that proves to be the case the GBP/EUR currency pair may extend gains.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4128
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast – US Services Sector Growth Declines but ‘Greenback’ Supported by Durable Goods, Confidence Numbers
The Pound Sterling to US Dollar (GBP/USD) exchange rate fell to a low of 1.5351 on Tuesday as the US published a mixed bag of economic reports.
While US Durable Goods Orders figures for March were positively revised, and Durable Goods Excluding Transportation exceeded forecasts in April, the Markit Services/Composite PMI’s both registered declines, with the former measure falling from 57.4 to 56.4 and the latter index sliding from 57.0 to 56.1.
The Markit results were disappointing, but a stronger-than-forecast increase in US Consumer Confidence limited US Dollar declines.
Consumer Confidence was shown to have increased from a negatively revised 94.3 to 95.4 in May, beating the anticipated score of 95.0.
The data supports the case in favour of the Fed raising borrowing costs this year and gave the Pound a boost.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a high of 1.5471
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: UK Mortgage Applications and GDP Reports Ahead
As outlined above, the German Confidence Index is the only notable ecostat from the currency bloc on Wednesday. US data is in equally short supply, with only MBA Mortgage Applications scheduled for release.
UK data is lacking until Thursday, when the nation will publish the BBA Loans for House Purchase report and first quarter growth data.
Loans for house purchase are expected to have risen from 38,751 to 39,300 while GDP is due to be positively revised on both a quarterly and annual basis.
If these UK ecostats meet estimates they could bolster demand for Sterling.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7070, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5396, the US Dollar to Pound Sterling (USD/GBP) exchange rate was trading in the region of 0.6494, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4139
