Last week the Pound Sterling to Euro (GBP/EUR) exchange rate was trending close to a month-high while the Pound Sterling to US Dollar (GBP/USD) exchange rate moved away from a seven-month best – the direction taken by both pairings over the next five days will depend on a number of factors.
Let’s look at today’s main causes of Pound Sterling (GBP), Euro (EUR) and US Dollar (USD) exchange rate movement…
Pound Sterling (GBP) Exchange Rate Forecast to Hold Best Rate of 2015 against Euro (EUR), GBP/USD Fluctuates
Last week was very quiet in terms of UK reports, but this week’s economic calendar is looking a lot fuller.
Today the main cause of Pound Sterling (GBP) exchange rate movement is likely to be domestic mortgage approvals data.
The number of approvals issued is believed to have risen from 68,100 in April to 68,500 in May.
This sign that lending is picking up would be Pound-supportive. Later in the week GBP/EUR, GBP/USD and GBP/AUD exchange rate fluctuations may be inspired by the UK’s Manufacturing, Services and Construction PMIs.
These three indexes of the UK’s primary sectors will provide a good indication of how the nation’s economy performed at the close of the second quarter. Strong numbers will lend credence to the belief that the Bank of England (BoE) may look to raise borrowing costs towards the close of the year and could push the Pound higher.
The situation in Greece also helped the Pound Sterling to Euro (GBP/EUR) exchange rate return to trending at its best rate of the year so far early this morning.
Euro (EUR) Exchange Rate Falls against Pound (GBP) and US Dollar (USD) Today as Grexit Odds Climb
Friday’s announcement from the Greek Prime Minister regarding the nation holding a referendum on whether to except the reform proposals put forward by the nation’s lenders put several manic cats among the pigeons.
The fact that Greece is now very unlikely to enter into any sort of agreement ahead of Tuesday’s repayment to the International Monetary Fund (IMF), coupled with the fact that an extension of the country’s current bailout programme has been refused, has significantly increased the odds of a default occurring.
With the likelihood of a Greek exit from the Eurozone higher than ever, the Euro could fall against peers like the Pound (EUR/GBP) and US Dollar (EUR/USD) over the course of the day.
Demand for the common currency will also be affected by the Eurozone’s Consumer Confidence report and Germany’s Consumer Price Index.
While sentiment is likely to decline in the currency bloc given the current state of affairs, inflation in the region’s largest economy could accelerate and lend the Euro a small measure of support.
US Dollar (USD) Exchange Rate Forecast to Turn Bullish this Week if US Jobs Data Impresses
While today’s US Pending Home Sales number and Dallas Fed Manufacturing Activity Index could prompt some US Dollar to Pound Sterling (USD/GBP) and US Dollar to Euro (USD/EUR) movement, investors with an interest in the ‘Greenback’ will largely be looking ahead to Friday and the release of the US Non-Farm Payrolls report.
The Fed has frequently asserted that a strong labour market and climbing average earnings will be a prerequisite to higher interest rates so if this report demonstrates those things it will put a September rate adjustment from the Fed back on the table and keep the US Dollar performing strongly against its peers.
Pending Home Sales are believed to have increased by 1.2% in May, month-on-month, following the 3.4% gain recorded in April.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.4196, the Euro to Pound Sterling (EUR/GBP) exchange rate is trending in the region of 0.7040 and the US Dollar to Pound Sterling (USD/GBP) exchange rate is trending in the region of 0.6358
Comments are closed.