The Pound Sterling to Euro (GBP/EUR) exchange rate continued trending above 1.39 on Thursday after being bolstered by some dovish comments from the European Central Bank (ECB) while the Pound Sterling to US Dollar (GBP/USD) exchange rate held an advance recorded in response to soft US data.
Pound Sterling to Euro (GBP/EUR) Exchange Rate News: Protest Disrupts ECB Press Conference but Draghi Maintains Dovish Demeanour
With UK data in short supply yesterday, the movement in the Pound Sterling to Euro (GBP/EUR) exchange rate largely occurred in response to the European Central Bank’s (ECB) interest rate decision and accompanying press conference.
To the surprise of no one, the ECB left fiscal policy unchanged. However, what did come as something of a shock was a young protestor mounting the stage and pelting ECB President Mario Draghi with glitter.
The protestor, who acted out of a desire to end the ECB’s ‘dick-tatorship’ in Europe, was swiftly removed from the vicinity and the press conference was allowed to continue.
The Pound Sterling to Euro (GBP/EUR) exchange rate hit a high of 1.3954
Whilst Draghi remained exceedingly calm, he also maintained a dovish stance. Although he asserted that the quantitative easing measures rolled out in March are having the desired effect, he added that (as it stands) the programme will stay in place until next September, as originally outlined.
Some economists had hoped that Draghi would intimate that a shorter timeframe would be appropriate given the impact QE has had already.
The Euro declined in response to the news that the ECB still believes such an aggressive level of stimulus to be necessary.
Draghi was optimistic about the currency bloc’s prospects though, commenting; ‘The Euro area economy has gained further momentum since the end of 2014. We expect the economic recovery to broaden and strengthen gradually.’
Euro weakness was also due to the news that top ratings agency Standard & Poor’s cut its credit rating for Greece in light of the current situation.
The UK also published surprisingly strong house price data.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate News: ‘Cable’ Advances as US Data Pushes Back Federal Reserve Interest Rate Hike Expectations
While the Pound continued performing well against the Euro, the British currency also advanced on the ‘Greenback’ over the course of the European session.
The Pound Sterling to US Dollar (GBP/USD) exchange rate rallied following the publication of a below-forecast US Industrial Production report.
Economists had envisaged industrial output falling by -0.3% in March, but it actually slumped by -0.6%.
As this week’s US Advance Retail Sales data also fell short, this figure saw investors push back Federal Reserve interest rate hike bets to September.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a high of 1.4880
The US Dollar accordingly softened against a number of its peers.
Manufacturing Production printed at 0.1%, as projected, and ‘Greenback’ losses were a little limited thanks to an improvement in the NAHB Housing Market Index. The measure had been expected to come in at 55 but instead rose from a negatively revised 52 to 56 in April.
Sterling held gains against the US Dollar on Thursday and with UK data once again lacking, ‘Cable’ may trend in a fairly narrow range ahead of the release of the US initial jobless/continuing claims numbers.
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: Volatility Expected as UK Jobs Figures, US CPI is Published
Movement in both the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates may be stilted today with data in such short supply, but the week is likely to end with a flurry of movement as both the UK and US issue influential reports.
The main mover for the Pound will be the UK’s latest employment figures. Economists are projecting a decline in the unemployment rate and an increase in average earnings excluding bonuses – both developments would be Sterling-supportive.
In terms of the possible creation of Euro fluctuations, investors will be focusing on the Eurozone’s currency account data and final inflation figures.
Before the weekend, the US Consumer Price Index will be drawing attention.
If the numbers hit expected levels, US Dollar shifts will be minimal. However, falling inflation in the world’s largest economy could drive ‘Cable’ to fresh weekly highs.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7175, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.4838, the US Dollar to Pound Sterling (USD/GBP) exchange rate was trading in the region of 0.6738, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3934