The Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates were trading lower on Thursday after UK Retail Sales contracted by -0.5% in March rather than recording the +0.5% growth as forecast, while the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in a narrow range after RBA rate cut speculation faded and weak Chinese data emerged.
China’s HSBC Manufacturing Purchasing Managers Index (PMI) hit 49.2 in April after the previous month’s 49.6; the April ecostat recorded a 12-month low.
Earlier… The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in a tight range on Thursday after Markit’s April German Manufacturing, Composite and Services PMI’s dropped, while the Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Australian Dollar (GBP/AUD) exchange rates were trading lower.
Germany’s Manufacturing PMI hit 51.9 in April from March’s 52.8, while Markit’s German Services PMI slipped from 55.4 to 54.4.
The Pound Sterling to Euro (GBP/EUR) exchange rate remained in a tight range in Wednesday’s European session while the Pound Sterling to US Dollar (GBP/USD) exchange rate climbed and the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped after the Reserve Bank of Australia’s (RBA) inflation figure advanced.
The RBA Trimmed Mean Consumer Price Index (CPI) rose from 2.2% to 2.3% in the first quarter year-on-year.
Meanwhile, the Pound Sterling exchange rate jumped after the Bank of England’s (BoE) meeting minutes had a hawkish edge.
Industry expert James Knightly commented: ‘This appears to be a mildly more hawkish assessment from the Bank of England, with two MPC members regarding the decision as ‘finely balanced’ as to whether to tighten policy. Were it not for election uncertainty, we think that the market would be more convincingly looking for a rate rise this year.’
‘Should the election proceed smoothly (or more smoothly than the market is anticipating) then we suspect a November move remains a distinct possibility.’
#BoE minutes shows no change in voting. 2 members said decision was finely balanced. GBP strength may be lowering inflation faster
#GBP
— Joshua Raymond (@Josh_CityIndex) April 22, 2015
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending higher in Tuesday’s European session after the release of ZEW’s German Economic Sentiment and Current Situation Surveys, while the Pound Sterling to Australian Dollar (GBP/AUD) and Pound Sterling to US Dollar (GBP/USD) exchange rates declined.
Euro to Australian Dollar (EUR/AUD), US Dollar (EUR/USD) and Pound Sterling (EUR/GBP) Exchange Rate Forecast
The Euro could be in for further losses in the remainder of Tuesday’s session after ZEW’s German Economic Sentiment survey slipped from 54.8 to 53.3 in April, rather than climbing to the 55.3 forecast.
The Eurozone’s ZEW Economic Sentiment Survey also climbed from 62.4 to 64.8, a little shy of the 65.7 forecast.
But it’s been a mixed bag for Eurozone data as the German Current Situation Survey rocketed higher from 55.2 to 70.2 in April, far better than the predicted 56.5.
Germans feeling great! pic.twitter.com/usgtPP5Bh1
— Lex van Dam (@lexvandam) April 21, 2015
US Dollar to Pound Sterling (USD/GBP), Euro (USD/EUR) and Australian Dollar (USD) Exchange Rate Forecast
The US Dollar to Euro (USD/EUR), US Dollar to Australian Dollar (USD/AUD) and US Dollar to Pound Sterling (USD/GBP) exchange rates are forecast for a quiet day of trading on Tuesday with no US or UK data out for release. Therefore, investors are likely to look at global developments or ahead to the rest of the week’s data for US Dollar movement.
Monday saw Federal Reserve New York President William Dudley remain upbeat about the US economic recovery and hint that US interest rates were likely to be raised this year.
Dudley stated: ‘Hopefully [data will] support a lift off later this year.’
However, Dudley added: ‘Because the economic outlook is uncertain, I can’t tell you when normalisation will occur. The timing is data dependent. We will have to see what unfolds.’
Wednesday may be a more influential day for the US Dollar exchange rate with the release of MBA Mortgage Applications and Existing Home Sales figures. Furthermore, investors will be looking at Wednesday’s US Crude Oil Inventories figure for some hint of whether oil prices may rebound.
Australian Dollar to US Dollar (AUD/USD), Euro (AUD/EUR) and Pound Sterling (AUD/GBP) Exchange Rate Forecast
The Australian Dollar exchange rate fell against a host of other majors overnight as the Australasian session saw the Reserve Bank of Australia (RBA) announce that another interest rate cut may occur in the near future as a result of ‘exuberant’ Sydney house prices.
RBA Governor Glenn Stevens stated: ‘Popular commentary is, in my opinion, too focused on Sydney house prices and pays too little attention to the more disparate trends among the other 80% of Australia. That said, it is hard to escape the conclusion that Sydney prices – up by a third since 2012 – look rather exuberant.’
Stevens spoke about a balance that needs to be struck between the Australian economy and the housing market and suggested that interest rate adjustments could be a tool the central bank uses.
Stevens continued: ‘Credit conditions are only one of several factors at work here. But credit conditions are very easy. So while the conduct of monetary policy can’t allow these financial considerations to dominate the “real economy” ones completely, nor can it simply ignore them. A balance has to be found.’
The Australian Dollar to US Dollar (AUD/USD), Australian Dollar to Euro (AUD/EUR) and Australian Dollar to Pound Sterling (AUD/GBP) exchange rates could be in for another influential day on Wednesday with the Australian Consumer Price Index figures scheduled for release. A fall in Australian inflation could see the ‘Aussie’ exchange rate tumble.
Pound Sterling to US Dollar (GBP/USD), Australian Dollar (GBP/AUD) and Euro (GBP/EUR) Exchange Rate Forecast
The Pound Sterling exchange rate could be in for some choppy trading on Wednesday if the Bank of England’s (BoE) meeting minutes reveal a policymaker divergence on the topic of interest rate hikes.
Last year saw policymakers divided on whether an interest rate increase would be a favourable development or not; however, global inflation fell on account of oil prices and saw hope in a rate increase diminish.
Thursday will see the release of UK Public Sector Net Borrowing and UK Retail Sales figures which could influence the GBP/AUD, GBP/EUR and GBP/USD currency pairs moderately.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is reaching 1.9304. The Pound Sterling to US Dollar (GBP/USD) exchange rate is trading at 1.4942; the Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3888.