Friday’s session was pivotal for the Euro and US Dollar, with both currency exchange rates driving the movement of the limp Pound’s exchange rates throughout the day..
- The pound to euro exchange rate today: 1.15742, with a 7 day range of 1.1574-1.1792.
- The pound to Australian dollar exchange rate today: 1.68869.
- The pound to dollar exchange rate today: 1.29195.
Eurozone Q2 growth figures revealed that while France and Italy’s economies had stagnated between April and June, Germany’s economic growth had softened less than expected. This left the Eurozone growing 0.3% throughout the quarter.
However, the US Dollar plummeted as disappointing July retail sales figures caused Fed rate hike bets to plummet even further, allowing GBP/USD to recover from its worst levels.
A weaker-than-expected UK Construction Output figure for June failed to particularly weigh on the Pound against rivals like the euro, US dollar on Friday morning, with Sterling finding limited support in consolidation trading.
The Euro, on the other hand, was on bullish form thanks to the second quarter German GDP report bettering forecast, despite signs of weaker growth in Italy.
Sterling dropped to its worst post-Brexit levels against the Euro on Thursday, slipping increasingly near to 1.15 as the pound to dollar exchange rate fell past the key level of 1.30 into 1.29.
The US Dollar’s recovery rally lasted for much of Thursday’s session, but with Fed rate hike bets still low it is unlikely that GBP/USD will plummet much lower until more US data that supports a possible rate hike is published.
The lowest GBP-EUR exchange rate so far today has been 1.1606; if tomorrow’s UK construction output data falls as expected, the Pound has the potential to drop to the high end of 1.15.
Sterling reached a low of 1.2950 versus the Dollar on Tuesday and under 1.30 for the first time in a month, as investors prepared for more bad news on the UK economy in the wake of the Brexit decision. The Pound dropped for a fifth straight trading day against the Euro, falling to a low of 1.1624 and close to the post Brexit lows that we saw towards the end of June.
It was a similar story against all of the 16 most actively traded currencies but particularly versus the higher-yielding currencies. The Pound fell below the 1.70 level against the Australian Dollar to the lowest level in 2.5 years and hit lows of 1.6839 overnight. The Bank of New Zealand lowered interest rates by 25 basis points as was widely anticipated and the Pound declined through 1.80 versus the Kiwi Dollar to a low of 1.7806.
Negative Sentiment Weighs on Pound Sterling (GBP) Exchange Rate Forecasts
The negative sentiment engulfing the Pound following a sustained period of market stability has really increased since the Bank of England cut interest rates last week and announced that it would begin £60 billion worth of quantitative easing to boost the economy. The Pound is falling heavily and we can expect further losses with a move towards 1.25 against the U.S Dollar by the end of September and 1.13 versus the Euro.
The UK currency is reeling amid speculation the reports, due next week, will show the damage to the UK economy following Brexit. The contraction in services, manufacturing and construction in the month of July has raised the chances of a UK technical recession by the first quarter of 2017 and prompted further speculation that the Bank of England will cut interest rates again to 0.1%.
Current Pound Sterling (GBP) Exchange Rates
On Saturday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.858
FX markets see the pound vs euro exchange rate converting at 1.165.
Today finds the pound to us dollar spot exchange rate priced at 1.255.
The GBP to AUD exchange rate converts at 1.901 today.
NB: the forex rates mentioned above, revised as of 4th May 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
British Pound (GBP) on Longest Losing Streak Against Euro (EUR) and US Dollar (USD) Since May 2016
The Pound is currently suffering its longest losing streak since May and that has been exacerbated by comments from BoE policy maker Ian McCafferty who has warned this week that further rate reduction and quantitative easing may be required.
His bearish comments are quite surprising given that he was voting to raise interest rates as recently as January, but like Martin Weale, McCafferty is concerned with the economic outlook, after the Bank downgraded growth forecasts by the most on record.
Investors are beginning to realise that the BoE are actively weakening the Pound through its policy decisions and many believe that the weakness in the Pound is welcomed by policy makers for the positive effect it will have on UK exporters.
Data Released 11th August 11, 2016
U.S 13:30 Import / Export Prices (July)
U.S 13:30 Initial Jobless Claims (w/e 6th August)