Today's British Pound Falls vs Euro, US Dollar as Demand for GBP Eased
The Pound exchange rates (vs Euro and US Dollar) witnessed a boost from the BoE’s latest policy meeting minutes last week, with Sterling (GBP) gaining in response to hopes that the situation in China won’t delay an interest rate increase from the central bank.
A quick foreign exchange market summary before we bring you the rest of the report:
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 canadian dollar spot exchange rate priced at 1.715.
At time of writing the pound to australian dollar exchange rate is quoted at 1.901.
FX markets see the pound vs us dollar exchange rate converting at 1.255.
Please note: the FX rates above, updated 4th May 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.
British Pound to Euro Exchange Rate Close Week Stronger, GBP-USD Hits Two-Week Best Rate
The Pound began last week badly, with the British currency still suffering from the publication of disappointing UK service sector data and its impact on BoE interest rate hike speculation.
However, over the course of the week the Pound steadily recovered losses and managed to strike a two-week high against the US Dollar as a result of the slightly hawkish tint to the BoE’s meeting minutes.
The minutes showed a 8-1 split on the vote for when to increase interest rates, with policymaker Ian McCafferty voting in favour of an immediate adjustment.
Industry experts like BNP Paribas viewed the minutes as being supportive of UK interest rates being adjusted in February of next year.
BNP Paribas analysts stated; ‘The minutes downplayed external risks to some extent, noting that it was premature to assume that developments in China would have a material effect on the UK economy. Furthermore, the minutes highlighted that some members saw continued upside risks to the inflation outlook.’
On Friday the Pound Sterling to US Dollar exchange rate achieved a high of 1.5462BNPP Forecasts Stay Long on British Pound: Sterling Predicted to Rally against Euro and US Dollar in 2015?
The British Pound may have fallen from its best rates against the Euro and US Dollar in recent weeks as global economic headwinds, patchy domestic data and Federal Reserve policy speculation took a toll but the currency has the potential to return to former levels if the BoE stays on course to hike rates in the first quarter of next year.
BNPP stated; ‘With BNP Paribas positioning analysis now signalling GBP positioning is at its shortest point since the May elections, we think risks are skewed to Sterling upside.’
The Pound could also be given opportunity to rise against the US Dollar if the Fed pushes back its own plans for altering borrowing costs while the Euro to Pound exchange rate could rally if the European Central Bank (ECB) expands its quantitative easing programme to counter the impact of developments in China on domestic price pressures.
US Dollar & Euro Forecast: Could GBP to USD, EUR Return to Best Exchange Rates of 2015 on UK Inflation Data?
The data which could really give GBP a boost against USD, EUR next week is the UK’s latest Consumer Price Index. An uptick in inflation would be very well received, potentially having the impact to drive the Pound Sterling to Dollar (GBP-USD) exchange rate pairing to a new multi-week best rate. However, a return to deflation would have the opposite effect.
Other UK news to be aware of includes the UK’s employment numbers for the three months through July, with a rise in average earnings or decline in joblessness being Pound-positive.
Latest Pound Sterling to euro (GBP/EUR) and US Dollar (GBP/USD) exchange rates update:
The British Pound was trending in a narrow range against both the Euro and US Dollar exchange rates on Monday as investors digested the news that Jeremy Corbyn was elected leader of the Labour party.
GBP-EUR fluctuations could occur later today as the Eurozone publishes industrial production data but GBP-USD volatility is likely to be limited ahead of tomorrow's UK inflation data and Thursday's interest rate decision from the Federal Reserve.
USD Dollar Update:
The US Dollar exchange rates experienced movement on Tuesday as a batch of US data supported the case in favour of the Federal Reserve leaving interest rates on hold on Thursday.
Advance retail sales had been expected to come in at 0.3 per cent in August, down from a positively revised 0.7% in July. However, sales growth actually came in at 0.2%, with sales less autos printing at 0.1% rather than the 0.2% forecast.
In the view of Bloomberg; ‘Tuesday’s report confirms a steady-as-she-goes narrative that’s characterised consumer spending throughout the recovery. In turn, spending has become a major pillar of support for growth. The economy expanded at a 3.7% annualised rate in the second quarter on bigger gains in consumer and business spending, as well as a surge in inventories. Lower energy prices and solid labour market progress are supporting consumption’.