UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.1% on Wednesday morning, whilst the Pound Sterling to US Dollar (GBP/USD) exchange rate gained by around 0.2%.
With a complete absence of domestic data to drive changes, the Pound is holding relatively steady versus its major peers. Hawkish comments from Monetary Policy Committee (MPC) member David Miles have had minimal impact given that he will be leaving the MPC before the next vote on interest rates.
The Euro, meanwhile, edged higher versus many of its currency rivals as traders await news on how Germany will vote on the terms of Greece’s third bailout. Although German Chancellor Angela Merkel has seen rebellion within her own party, most traders believe that Germany will vote to accept the terms. The chance of a debt haircut is far less likely as many German officials stated that it is against European law.
The US Dollar is generally trending lower versus its major peers as traders await US inflation data due for publication later on Wednesday afternoon. Although inflation is forecast to rise, recent data publications have produced varied results so traders are showing reluctance to invest heavily ahead of the results.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4185.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5688.
Yesterday…
GBP/EUR Rallies as Euro-Area Nations Prepare to Vote on Greek Bailout Terms
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.6% on Tuesday morning.
In response to better-than-expected British inflation data, the Pound strengthened versus all sixteen of its most traded currency rivals. July’s Consumer Price Index came in at 0.1% on the year; eclipsing the median market forecast flat line figure. In addition, July’s Core Consumer Price Index came in at 1.2% on the year; bettering the market projection of 0.9%. The inflationary improvement is significant because the Bank of England (BoE) highlighted the lack of inflationary pressure as one of the principle reasons behind holding the record-low cash rate.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4144.
With a complete absence of domestic data to provoke changes, the single currency is trading fairly statically versus most of its currency rivals. Traders are showing reluctance to invest heavily as they await news from Spain, Estonia and Austria – the nations due to vote on the most recent terms for Greece’s third bailout package today.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4049 to 1.4158 during Tuesday’s European session.
GBP/USD Exchange Rate Advances ahead of US Housing Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced by around 0.6% on Tuesday morning.
In response to the British inflation data, the Office for National Statistics (ONS) stated; ‘Overall clothing and footwear prices fell by 3.4% between June and July this year compared with a larger fall of 5.7% between the same 2 months a year ago. Prices always fall between June and July during the summer sales period. The downward contribution came from price movements in most sectors – notably in the milk, cheese and eggs sector – where the prices of 2 pint cartons of shop bought milk have fallen. There was a partially offsetting contribution from rising prices in the bread and cereals sector.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5668.
As traders await US housing data, the ‘Greenback’ (USD) is generally trending statically versus its major peers. A slight depreciation can be linked to continued fears that the recent issues in China will delay a Federal Open Market Committee (FOMC) benchmark rate hike. With opinions divided as to the timing of a rate liftoff, the US Dollar is likely to fluctuate as traders react to individual data publications.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5560 to 1.5676 during Tuesday’s European session.
