The Pound to Euro exchange rate is currently trading at 1.210
The Pound to US Dollar exchange rate is currently trading at 1.590
The Euro to US Dollar exchange rate is currently trading at 1.314
The Pound has been trading relatively well over the past week as a strong set of PMI figures gave the UK economy a timely boost. Just days after the Office for National Statistics revised their 2011 UK Q4 GDP figures down from -0.2% to -0.3%, PMI’s for Services, Manufacturing and Construction exceeded economists’ expectations and allowed Sterling to reassert itself.
Fears had begun to resurface that the UK had slipped into contraction in the first 3 months of 2012; media speculation suggested that last year’s deficit may have been too large to recover from. But the strength of the UK’s ecostats in recent weeks appears to have propelled the economy out of contraction. The Bank of England refrained from further stimulus in the form of adding to their Quantitative Easing programme and they kept interest rates on hold at the record low 0.50%. Q1 estimates for 2012 have since been released at a positive 0.1% GDP growth.
However the optimism surrounding the British economy always has to be weighed against the global sentiment of risk-on or risk-off trading. As the Pound built itself a sound perch above strong psychological levels of 1.600 against the US Dollar and 1.2100 against the Euro, global economic outlook took a turn for the worst and financial forecasts started to deteriorate. The Pound to Euro exchange rate remained well bid in the Pound’s favour as the focus in the Eurozone shifted momentarily from Greece to Spain. Spanish 10-year bond yields are rising at an alarming rate and global stocks suffered a significant sell-off.
The Pound’s resilience was tested by flocks of investors finding safe haven in the US Dollar; whilst the GBP/USD is still trading relatively well, Sterling will find it difficult to establish itself above the 1.600 mark, given the uncertainty that is rippling around the global marketplace.
Future currency forecasts for the Pound to Euro exchange rate see the pair fluctuating slightly with a minor bias towards Sterling. Rising bond yield pressures could weigh on the Euro, but the vast number of investors ready to take up profit making stances should stem any significant pushes.
Future currency forecasts for the Pound to US Dollar exchange rate see Sterling struggle to make an impact, especially if the 8.7 magnitude Indonesian earthquake causes disruption in Asia, which is most likely to heighten fear factors and favour the Dollar.
Future currency forecasts for the Euro to US Dollar exchange rate see the Greenback challenge the single currency and possibly make a charge below 1.300. Risk sentiment rules the US Dollar, but in recent times the speed at which the US economy is seen to be outpacing its closest rivals has allowed the Buck to benefit in both risk-on and risk-off situations.
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