The Pound Japanese Yen (GBP/JPY) exchange rate has spent the week trading in a broad range as the pairing remain close to weekly lows heading into the weekend.
At the time of writing on Friday, GBP/JPY is trending at around 149.358 as both currencies find support in flash PMI data released earlier this morning.
Pound Sterling (GBP) Exchange Rates Supported by Better-Than-Expected UK Data
The Pound has found support today from a range of better-than-expected data from the UK released this morning which helped boost market appetite for Sterling.
Both UK retail sales figures from March and flash PMI data for April both beat forecasts.
UK retail sales during March rose 5.4% over the month, well above the expected 1.5%, and the yearly figure surged to 7.2%.
Paul Dales, chief UK economist at Capital Economics, commented on the growth saying:
‘March’s strong rise in retail sales showed that the economy made a fair bit of progress even before non-essential retailers reopened in April.’
More so, the latest PMI projections for April from the UK were positive and helped support the Pound throughout the day.
The UK services business activity index grew to 60.1, the fastest growth since 2013, as reported by HIS Markit who compiles the survey:
‘Moreover, for the first time since the Covid-19 pandemic began, service activity growth outperformed manufacturing production. This was largely due to a boost from easing government stringency measures regarding some consumer services and non-essential retail in England and Wales from mid-April, with Scotland and Northern Ireland set to follow similar reopening paths by the end of this month.’
Japanese Yen (JPY) Exchange Rates Benefitting from Weakness in Rivals
The Japanese Yen is continuing to find support from the global market mood heading into the weekend as the currency benefits from flash PMI readings for April.
A continued weakness in the US Dollar (USD), the Japanese Yen’s largest rival, is helping to boost JPY after President Joe Biden’s planned tax hikes were met with a mixed market reaction.
Uncertainty is rising over an unprecedented surge of coronavirus cases in India as a ‘tripe mutated’ variant of the virus causes investors to worry and head towards safe-haven currencies like the Japanese Yen.
GBP/JPY Exchange Rate Forecast: Both Currencies Could Keep Strengthening
Over the weekend the Pound Japanese Yen exchange rate will continue to be driven by the global market mood, a continuing rise in coronavirus cases could push JPY higher.
In absence of any notable data next week, Pound investors will instead keep an eye on any coronavirus developments, an influx of Indian variant of the virus in the UK could cause investors to become concerned over the planned roadmap out of lockdown.
For Japanese yen traders, the April policy decision from the Federal Reserve next week will be in focus next week, if the Fed remain dovish in their outlook then JPY could head higher.
Moreover, a policy decision from the Bank of Japan as well as Japanese retail sales and unemployment data, could also influence the exchange rate next week.
Comments are closed.