Pound Sterling Exchange Rate Forecasts Strong Post Bank of England Minutes Today
With the weekend approaching, investors started looking ahead to next week's influential UK news for guidance on how the Pound to Euro (GBP-EUR) exchange rate is forecast to perform.
The British Pound remained relatively unchanged against the Euro on Thursday, despite a host of key central bank announcements.
A quick foreign exchange market summary before we bring you the rest of the report:
On Tuesday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
Today finds the pound to pound spot exchange rate priced at 1.
The live inter-bank GBP-CHF spot rate is quoted as 1.138 today.
The live inter-bank GBP-USD spot rate is quoted as 1.256 today.
Please note: the FX rates above, updated 7th 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.
Pound to Euro Exchange Rate Holding Steady after BoE Minutes
The Bank of England held UK interest rates at a record low of 0.5% and the Monetary Policy Committee voted by 8-1 in favour of keeping rates unchanged with Ian McCafferty again the sole voice for an immediate rate hike for the third month in a row.
UK interest rates have remained unchanged at the current level for more than six years and there is still some way to go before the BoE start raising interest rates when you consider that inflation is still at zero and the UK economic outlook has soured in the third quarter.
The central bank said cost pressures in the UK’s labour market were rising too slowly for inflation to return to the Bank’s 2% target, and that inflation would stay below 1% until the Spring of next year.
UK Inflation Data to Dictate GBP Exchange Rate Trading
UK consumer price inflation has been hovering around zero per cent for the past few months, but the Bank of England has previously maintained that the pace of inflation will accelerate quite significantly in the second half of the year.
That has failed to materialize and that has pushed back interest rate expectations, which has hurt the Pound and reduced demand for the UK currency globally.
Although consumer spending has remained resilient, bolstered by wage growth, the government’s attempts to reduce the UK budget deficit had restrained activity and global growth has been below average.
Concerns over a Chinese economic slowdown has also spurred concerns over the UK outlook but policy makers seemed relatively relaxed in the minutes released yesterday, saying that there was little evidence that the slowdown in emerging markets was having much impact on developed economies.
Most economists are still banging the drum that UK interest rates will rise next year, though some believe it will be later in the year after the FOMC take the decision.
Pound to Dollar Forecast: Will GBP-USD Return to Best Exchange Rates?
The Pound has made strong gains against the Dollar overnight and the U.S currency has come under renewed selling pressure amid expectations that the FOMC will refrain from raising rates before the turn of the year.
The EUR/USD exchange rate has hit a high of 1.1350 and if the Euro continues to perform against the U.S Dollar then it is likely that the GBP/EUR rate will struggle to trend higher.
The Fed minutes revealed that policy makers believed the U.S economy could cope with a rate increase but felt it was “prudent to wait” considering the problems in the global economy.
The commodity-driven currencies subsequently rallied strongly with the Australian Dollar trading close to 2.10 versus the Pound, almost a 5% move from the highs around 2.20 last month.
Data Released 9th October 2015
U.K 09:00 Goods Trade Balance (August)
- Non EU
U.S 13:30 Import / Export Prices (September)
U.S 15:00 Wholesale Inventories (August)