British Pound Sterling Exchange Rate (GBP) Complex Ends Last Week Stronger vs Euro (EUR) and US Dollar (USD)
Before the weekend the Pound (GBP) exchange rate prepared to post a five-day gain against both the Euro (EUR) and US Dollar (USD). The British currency was also able to rally against peers like the Australian Dollar (AUD) and New Zealand Dollar (NZD) over the course of the week as investors responded positively to a run of upbeat UK data.
A quick foreign exchange market summary before we bring you the rest of the report:
On Sunday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.857
The live inter-bank GBP-EUR spot rate is quoted as 1.167 today.
The GBP to CAD exchange rate converts at 1.707 today.
The live inter-bank GBP-AUD spot rate is quoted as 1.912 today.
Today finds the pound to us dollar spot exchange rate priced at 1.249.
NB: the forex rates mentioned above, revised as of 28th Apr 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.
Pound Sterling to Euro (GBP/EUR) US Dollar (GBP/USD) Exchange Rates Boosted by UK CPI, Wage Growth
The Pound’s impressive week of trading (which saw the GBP/USD exchange rate jump to a high of 1.59 and the GBP/EUR exchange rate advance beyond 1.40) began on Tuesday, when the UK’s Consumer Price Index was published. In April the UK entered deflation for the first time for decades, but the Bank of England promised that CPI’s dip below 0% would be short lived. The central bank’s confidence proved justified and the UK printed inflation of 0.1% in May. While the UK’s core CPI failed to advance by as much as expected, the Pound still rallied after the data was published.
At the time Reuters noted; ‘Bank of England Governor Mark Carney has previously said inflation is likely to pick up as last year's plunge in global oil prices works itself out of the numbers, and that Britain was not heading into a damaging period of deflation. Indeed, the BoE expects near-zero inflation to help the British economy by boosting the spending power of households.’
Further Pound gains occurred after UK average earnings were shown to have increased by considerably more-than-forecast.
Breaking Forex News: The GBP/EUR exchange rate hit a high of 1.40 this week
Currency News Now: GBP/EUR Gains on Greece, GBP/USD Higher after FOMC Announcement
The Bank of England meeting minutes and UK retail sales report kept the Pound trending higher, but there were other reasons for the GBP/EUR and GBP/USD exchange rate gains. The Pound Sterling to Euro exchange rate’s uptrend was also inspired by growing Greek concerns. The nation’s latest bailout proposal was rejected, negotiations were disbanded after just an hour and the Greek Prime Minister intimated that the Hellenic nation could forge a relationship with Russia – all Euro negative developments.
BBC economics editor Robert Peston said of the situation; ‘If the Greek government could find just one symbolic and money-saving measure, it seems fairly clear that a deal can still be done to release the crucial additional euros desperately needed by Greece to avoid default. Or to put it another way, Tsipras and Varoufakis need to swallow their pride and see the creditors not as a vicious running dog of capitalism that wants to savage and humiliate their proud country but as a slightly bewildered and still young mongrel that just wants to be thrown some kind of bone.’
Meanwhile, ‘Cable’ was able to achieve 7-month highs as a result of the FOMC’s dovish policy statement. The committee’s remarks, in conjunction with below-forecast US data, saw many economists bet that the Fed won’t touch interest rates until December.
Pound Sterling (GBP) Exchange Rate Projections – Pound to Hold EUR, USD Gains?
This week was pretty data-heavy, but next week is looking remarkably less so and Pound Sterling exchange rate movement may be limited as a result. The only UK reports worth mentioning are the Confederation of British Industry’s Trends Total Orders and Trends Selling Price figures, BBA Loans for House Purchase numbers and the CBI Reported Sales number.
FX Update: the GBP/USD achieved a high of 1.59 this week
Next week the US Durable Goods Orders report is likely to be a key cause of GBP/USD exchange rate movement.
GBP/EUR trading could be effected by the Eurozone’s Consumer Confidence index.