The Pound Sterling to Euro (GBP/EUR) exchange rate slipped in the first half of Thursday’s European trading ahead of the UK’s Markit Manufacturing PMI, while the Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Canadian Dollar (GBP/CAD) exchange rates were both trading higher.
Earlier.. The Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates sank in Thursday’s European trading after US jobless claims fell to its lowest level since 200, and a Euro exchange rate rally took the market by storm.
Earlier… The Pound Sterling to Euro (GBP/EUR) exchange rate tumbled in Thursday’s European trading after Eurozone Inflation and German Unemployment Change/Rate ecostats were published, while the Pound Sterling to Canadian Dollar (GBP/CAD) and Pound Sterling to US Dollar (GBP/USD) exchange rates both climbed after the Federal Open Market Committee (FOMC) monetary policy statement.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast
It’s been a quiet week for data from the Canadian economy and investors have been looking forward to Thursday for some exciting ‘Loonie’ exchange rate movement. The Canadian Dollar (CAD) is forecast for fluctuations later in North American trading with the release of Canadian Gross Domestic Product (GDP) figures.
On the year, February is predicted to record a decline from 2.4% to 1.9%. The month alone is forecast for a -0.1% contraction, a repeat of January’s performance. Additionally, coming weeks could be interesting for Canadian Dollar movement with the price of crude oil closing at $58.58 on Wednesday, the highest figure since December 11th.
The price of oil, Canada’s largest commodity, has been rebounding (hitting $59.33 earlier in Wednesday’s session) after US stocks began to record smaller inventory increases.
Industry expert John Kilduff commented: ‘Inventories at Cushing did finally draw down due to strong refinery demand, and that is supportive, since it will allay the fears of many that the operational storage capacity could be reached.’
Additionally, Thursday will see Bank of Canada (BOC) Governor Stephen Poloz testify to the Senate and his comments could cause Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate movements.
Friday will finish the week of Canadian data with the RBC Manufacturing Purchasing Managers Index (PMI) which is forecast to have a moderate impact on the Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast
The Pound Sterling to US Dollar (GBP/USD) exchange rate began Thursday trading in a slightly stronger position after the Federal Open Market Committee’s (FOMC) latest statement removed interest rate hike timeframes.
The Federal Reserve’s latest monetary policy report came in at only 560 words, marking the smallest word count since October 2012.
The Fed commented on the recent slowdown in the US economy, a factor that many industry experts believe could cause a delay in interest rate hikes and has placed downward pressure on the US Dollar (USD).
The FOMC statement read: ‘Information received since the Federal Open Market Committee met in March suggests that economic growth slowed during the winter months, in part reflecting transitory factors. The pace of job gains moderated, and the unemployment rate remained steady.’
‘A range of labour market indicators suggests that underutilisation of labour resources was little changed. Growth in household spending declined; households’ real incomes rose strongly, partly reflecting earlier declines in energy prices, and consumer sentiment remains high.’
The fact the Fed stated that the slowdown is ‘transitory’ suggests that policymakers expect the economic recovery to pick up speed again in the near future and therefore interest rate hikes could still occur this year.
However, with such a slowdown in economic data in the past few weeks alone, it’s hard to imagine the Federal Reserve becoming hawkish enough to hike borrowing costs in the near future. The Fed also removed all timeframe references in the April statement, not a favourable development for the US Dollar (USD) exchange rate.
Thursday will be another exciting day for US data with the release of US Personal Consumption expenditure figures. On the year in March, economists forecast the ecostat to stagnate at 1.4%; any deviation from the prediction could see the US Dollar to Pound Sterling (USD/GBP) exchange rate fluctuate.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
The Pound Sterling to Euro (GBP/EUR) exchange rate declined in the first part of Thursday’s European session with the release of German Retail Sales, which recorded annual growth from a negatively revised 3.3% in February to 3.5% in March but a monthly slide in consumer spending.
German #retail sales back to trend. Don't try to remember the -2.3% m/m, will be revised anyway. #Germany pic.twitter.com/1tlth372IM
— Holger Sandte (@HolgerSandte) April 30, 2015
German inflation data printed favourably on Wednesday and economists had forecast an upbeat Eurozone Consumer Price Index (CPI) on Thursday. Eurozone inflation came in at 0.0% in April year-on-year from the previous month’s -0.1%. Meanwhile, the Eurozone Unemployment Rate remained at 11.3% in March, rather than dropping to 11.2% as forecast.
German Unemployment Change data also disappointed and managed to weigh down the Euro (EUR) slightly when the ecostat recorded only a -8K reduction in joblessness. Economists had forecast a more favourable -15K in April after March’s -14K. The German Unemployment Rate remained steady at 6.4% in April.
Meanwhile, the Pound Sterling (GBP) exchange rate was offered some stability when GfK’s latest UK Consumer Confidence stat remained at 4 in April, in line with forecasts.
Friday will be an exciting day for the Pound Sterling to Euro (GBP/EUR), Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Canadian Dollar (GBP/CAD) exchange rates with the release of Markit’s UK Manufacturing PMI, UK Mortgage Approvals and UK Net Consumer Credit figures.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trading at 1.8587. The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending in the region of 1.5448; the Pound Sterling to Euro (GBP/EUR) exchange rate is trading at 1.3808.
