The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a limited range on Friday morning while the Pound Sterling to Australian Dollar (GBP/AUD) advanced by around 0.89%.
With a complete absence of domestic data to provoke volatility, the Pound is generally holding steady versus most of its currency competitors. A slight appreciation can be linked to optimism regarding Prime Minister David Cameron’s potential to have proposals to reform Britain’s relationship with the European Union accepted.
The Euro, meanwhile, avoided depreciating despite many recent talks between Greek and European officials bearing no fruit. This is most likely due to speculation that Saturday’s emergency meeting will see Greek officials accept the conditions laid out by creditors given that European Central Bank (ECB) President Mario Draghi said he would take Greek banks off life-support if they do not secure aid from creditors.
The Australian Dollar dived versus many of its currency rivals on Friday despite a complete absence of domestic data. The depreciation is the result of HSBC cutting its Aussie growth forecast for 2015. In addition, HSBC predicted that the Reserve Bank of Australia (RBA) would hold the cash rate throughout 2016; a change from the previous expectation for two rate hikes.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4046.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.0548.
Pound Sterling (GBP) Exchange Rate Forecast to Gain against the ‘Aussie’ (AUD) on Cameron Optimism
Prime Minister David Cameron attended the EU summit yesterday which was scheduled to discuss the migration crisis and the Greek crisis. Although the meeting was dominated by these affairs, the PM did have an opportunity to present a brief outline of a planned proposal for altering the relationship between Britain and the EU. In general, the plans were well received with most ministers willing to help Britain. ‘People always say to me these things aren’t possible, we will never get them done. Once again, we have proved we will get them done.’ said Cameron. ‘We have started that process and it’s under way.’
European Council President Donald Tusk said: ‘One thing should be clear from the very beginning. The fundamental values of the EU are not for sale and so are non-negotiable. We should consider British concerns, but only in a way which will be safe for all Europe.’
Euro (EUR) Exchange Rate Forecast to Hold Steady against the Pound ahead of Emergency Summit
Over the past week or so there have been several emergency meetings as Eurogroup officials sought to intensify negotiations with Greece. However, despite two meetings yesterday negotiations have been far from successful, with both sides finding differences to wide to bridge. There will be another emergency meeting in Saturday in what many are considering to be a last-ditch attempt for Greece.
European economic data printed poorly on Friday, although the results had minimal impact. This is likely to be linked to optimism regarding the forthcoming Eurogroup meeting given that Greece is running out of time and options and may be forced to accept conditions marked out by creditors.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the region of 1.4035 – 1.4079.
Australian Dollar (AUD) Exchange Rate Forecast to Soften against the British Asset after HSBC Cut Growth Forecast
The ‘Aussie’ softened versus most of its major peers on Friday after HSBC cut growth forecasts for 2015 and predicted that the RBA would hold the cash rate throughout next year. HSBC dropped the growth forecast from 2.6% to 2.4% due to lower expectations of Chinese economic growth and a lack of investment spending by domestic businesses.
‘It’s not so much a ‘global savings glut’ – as Ben Bernanke, the former chairman of the board of governors of the Federal Reserve once famously described it – but, instead a major shift in the preferences of savers in favour of a stable income stream. One consequence is less risk-taking. Another, by implication, is lower investment and, hence, weaker economic growth,’ the HSBC economists concluded.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending within the range of 2.0348 – 2.0467.
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