British Pound to Euro Exchange Rate Holds Losses Despite BoE Rate Comments
The British Pound to Euro exchange rate advanced by around 0.2 per cent on Wednesday morning, whilst the Pound to US Dollar exchange rate was trending within a limited range.
The GBP/EUR conversion rate softened amid ongoing concern regarding Tuesday’s poor manufacturing print.
The US Dollar is also trending lower due to disappointing manufacturing data in addition to dampened demand for safe-haven assets.
The improving market sentiment weighed on the Euro exchange rates which declined versus most of its major peers on Wednesday morning.
A quick foreign exchange market summary before we bring you the rest of the report:
On Thursday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
FX markets see the pound vs pound exchange rate converting at 1.
At time of writing the pound to canadian dollar exchange rate is quoted at 1.72.
At time of writing the pound to australian dollar exchange rate is quoted at 1.919.
The GBP to USD exchange rate converts at 1.254 today.
NB: the forex rates mentioned above, revised as of 2nd 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.
Pound Sterling Exchange Rates Hit 2 Month Low vs US Dollar and Euro
The British Pound (GBP) exchange rate was left trending in the region of a two-month low against the US Dollar (USD) and around the 1.36 level against the Euro (EUR) even as Bank of England (BoE) Governor Mark Carney adopted a moderately hawkish stance on the subject of UK interest rate increases.
Although the first quarter of 2016 had been viewed by many as the time when borrowing costs were most likely to rise, the recent situation in China and crash of commodity prices invited speculation that an adjustment would be delayed. Carney put some of these concerns to rest over the weekend by implying that the slowdown in China is likely to have only a limited impact on the UK.
During the Jackson Hole convention Carney commented; ‘The prospect of sustained momentum in the UK economy and the gradual firming of underlying inflationary pressures will likely put the decision as to when to start the process of gradual monetary policy normalisation into sharper relief around the turn of the year.’
British Pound Falls against US Dollar, Euro after UK Manufacturing PMI Comes up Short
The British Pound to euro (GBP/EUR) and Dollar (GBP/USD) exchange rates extended declines on Tuesday following the release of the UK’s manufacturing PMI.
The gauge had been expected to improve modestly, rising from 51.9 in July to 52 in August, but it actually fell to 51.5. As any moves from the BoE are likely to be data-dependent, this slightly disappointing result wore on demand for Sterling.
Markit economist Rob Dobson observed; ‘The UK manufacturing sector remains in a holding pattern, with production growth hovering around the stagnation mark and marginal job losses reported for the first time in 26 months. On this basis, the sector looks unlikely to make much of a contribution to the solid gain in broader GDP growth expected for the third quarter. On the price front, input costs fell at one of the sharpest rates during the past 16 years and selling prices were broadly unchanged.’
Euro to Pound Exchange Rate Outlook: German Unemployment Data Beats Forecasts, EUR gains on GBP, USD Today
While Demand for the British Pound was undermined by the disappointing UK manufacturing report, the Euro was able to advance on peers like Sterling and the US Dollar today despite a mixed bag of ecostats for the Eurozone. Final Manufacturing PMI’s for France, Italy and the Eurozone as a whole were negatively revised from previous estimates but Italian and German unemployment figures smashed forecasts. Whether or not the Euro is able to advance further still in the hours ahead largely depends on how the Eurozone’s unemployment report fares. Economists are expecting no change from the 11.1% rate recorded in June so an unforeseen dip in joblessness would be Euro-supportive.
The British Pound to Euro (GBP/EUR) exchange rate hit a low of 1.3559
Pound to Dollar: Exchange Rate Forecast to Fall Beyond 2-Month Worst Conversion Rate on US Manufacturing
The British Pound to US Dollar exchange rate could fall below the 1.53 level in the hours ahead if the US ISM Manufacturing gauge shows unexpected improvement. As it stands the measure is believed to have fallen from 52.7 to 52.5 and if it prints as expected the Pound could claw back some of this morning’s losses. However, a better-than-expected result would weigh on ‘Cable’.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a high of 1.5408
The Euro to Pound (EUR/GBP) exchange rate advanced on Thursday ahead of the European Central Bank (ECB) interest rate decision.
Most analysts agree that the central bank is unlikely to make any policy changes at this time amid so much uncertainty regarding China’s economic struggles.