The Pound Sterling to Euro (GBP/EUR) exchange rate was trending higher in Monday’s European trading while the Pound Sterling to US Dollar (GBP/USD) exchange rate remained in a narrow range after the Bank of England (BoE) opted to keep interest rates and QE on hold in May.
Pound Sterling to US Dollar (GBP/USD) and Pound Sterling to Euro (GBP/EUR) Exchange Rates Climb after BoE Interest Rate Decision
The BoE chose to keep rates on hold at 0.50% in May as the fallout from the general election settles. However, with a recent upturn in UK economic data and two members of the Monetary Policy Committee (MPC) finding the decision to keep interest rates on hold in April a ‘finely balanced’ one, we could look forward to a divergence in votes soon.
The two members who considered voting in favour of hiking rates are likely to be BoE hawks Martin Weale and Ian McCafferty who both spent several months of the last year suggesting rate hikes should take place immediately.
Euro to US Dollar (EUR/USD), Euro to Pound Sterling (EUR/GBP) Exchange Rates Forecast for Greek Movement as Brussels Meeting Takes Place
Meanwhile, the Euro is awaiting the outcome of Monday’s Brussels finance minister meeting, which could see some developments in the situation between Greece and its creditors. It’s fair to say that negotiations have been slow and as a result, frustration has been building within the Eurogroup. However, it’s hoped that Monday’s Brussels meeting will make some progress after months of lethargy.
Syriza spokesman Nikos Fillis commented: ‘[It depends] if it is a signal of crisis or a signal that we are a little before an agreement. We are at a very sensitive stage of the negotiations. Lenders have toughened their stance.’
‘They have put issues on the table that had been closed previously during negotiations, perhaps because they think they can pressure us like they did in the past.’
However, Tuesday’s to be another major day for the EUR exchange rate with Greece due to make a €800 million International Monetary Fund (IMF) loan repayment. Speculation over whether Greece will be able to make such a massive payment as the nation verges on the precipice of running out of funds has caused some significant EUR exchange rate movement in recent weeks.
US Dollar to Pound Sterling (USD/GBP), US Dollar to Euro (USD/EUR) Exchange Rates Forecast to Fluctuate on US Advance Retail Sales
Meanwhile, the US Dollar could be in for a relatively quiet day on Monday with only the release of US Labour Market Conditions Index Change data. Wednesday’s scheduled to be a more influential day for the ‘Buck’ with the highly influential US Advance Retail Sales number due for publication—an event which could cause major US Dollar to Pound Sterling (USD/GBP) and US Dollar to Euro (USD/EUR) exchange rate movement.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trading at 1.5671. The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3947.