The Pound Sterling to Euro (GBP/EUR) exchange rate was trending -0.43% lower on Thursday as the UK general election took place, while the Pound Sterling to US Dollar (GBP/USD) exchange rate was trading -0.30% softer despite forecasts for an unfavourable US Change in Non-Farm Payrolls stat on Friday.
US ADP Employment Change Softens US Dollar (USD) Exchange Rate Ahead of US Change in Non-Farm Payrolls
ADP vs. NFP Private Payrolls: pic.twitter.com/ogOQ3tCbwt
— Michael McDonough (@M_McDonough) May 6, 2015
Wednesday saw the release of the US ADP Employment Change figure which is used to gauge how US Change in Non-Farm Payrolls data will print on Friday. However, the ADP Employment Change number came in below forecasts at only 169K in April, rather than the 200K expected. Additionally, the March ecostat was negatively revised to 175K.
Now concern is growing that the Friday US Change in Non-Farm Payrolls number won’t reach the 230K forecast for April, and perhaps the US Unemployment Rate won’t decline from 5.5% to 5.4% as predicted.
Strategist Roy Teo commented: ‘The trend is still to sell Dollars on weakness into Friday’s numbers. The market is focused on whether the recent weakness in jobs data will continue into the coming months.’
Federal Reserve Rate Hike Speculation Heightens as US Economic Recovery Eases
The US Federal Reserve is under close scrutiny at the moment as investors try to glean any information about interest rate hikes this year. However, it’s not looking too fantastic as a string of recent US data highlights that the world’s largest economy is likely slowing down.
Greek Referendum Ahead? Euro (EUR) Exchange Rate Forecast to Fall on Grexit
Meanwhile, the Euro has recovered a little this week amid ongoing talks between Greece and its creditors. The Greek government is scheduled to hold a meeting on Friday which will discuss whether the nation will have a referendum to decide whether to compromise with creditors, or whether to stand firm despite the prospect of leaving.
Kathimerini newspaper states: ‘The meeting will take place amid increasing calls from SYRIZA MPs and members for any deal to be put to a referendum.’
Friday will see the Greek government meet to discuss the possibility of a referendum in Greece to give the people the final say on whether the nation accepts the terms of its creditors or goes it alone and leaves the currency bloc.
Pound Sterling Volatility Jumps as General Election Gets Underway
One of the main things dominating the currency market and Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rate trading is the major event of the UK general election.
After months of political debate, voters will be able to have their say in who runs the country—an event that could see the UK economy undergo significant changes under new leadership and cause massive Pound Sterling softness.
Additionally, UK Trade Balance ecostats will be out on Friday and the Pound Sterling to Canadian Dollar (GBP/CAD), Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates may feel some moderate influence from them.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trading in the region of 1.5241; the Pound Sterling to Euro (GBP/EUR) exchange rate is trending at 1.3393.