Today's Pound Sterling Exchange Rate Outlook vs the Euro and the US Dollar in the Global Currency Markets
A brief foreign exchange market summary before we bring you this currency report:
On Friday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.861
FX markets see the pound vs euro exchange rate converting at 1.161.
At time of writing the pound to us dollar exchange rate is quoted at 1.237.
At time of writing the pound to canadian dollar exchange rate is quoted at 1.701.
Please note: the FX rates above, updated 19th Apr 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 Outlook
The Pound Euro exchange rate advanced as the European Central Bank finally announced a quantitative easing programme.
The measures outlined by the ECB were also bigger and better than expected, triggering widespread Euro losses.
The British Pound had previously been pressured slightly lower by the UK’s budget deficit data, which showed an unexpected widening in the shortfall. The widening was largely due to unforeseen payments to the European Union.
According to economist Samuel Tombs; ‘December’s public finance figures showed that the pace of deficit reduction remains very slow given the economy’s recent strength and so case doubt over whether the much bigger planned reductions in borrowing in future years will be achieved.’
Pound Sterling Supported by BoE Official
That being said, the Pound did derive some support from one Bank of England official talking down concerns relating to the UK’s recent bout of low inflation.
David Miles insinuated that lower inflation would actually good for the UK economy and local consumers. He also added that there is currently no need for the Bank of England to take defensive action against the threat of disinflation.
GBP/EUR Exchange Rate Hits Fresh Highs
As the European session continued, the GBP/EUR pairing advanced to a fresh seven year high as a result of the ECB’s 1 trillion Euro quantitative easing programme.
The Euro also dropped to an 11 year low against the US Dollar and posted notable declines against the Aussie and Canadian Dollars. This weakness could persist into tomorrow.
Pound to Dollar Exchange Rate Today
The UK’s public finance figures cause softness in the GBP/USD pairing in the European session and the Pound extended declines as the US published several economic reports.
The Pound to US Dollar exchange rate fell by around 0.6% before the close of trading. US initial jobless claims increased by 307,000 in the week ending January 17th, more than the 300,000 rise anticipated.
However, continuing claims matched forecasts and the US House Price Index advanced strongly in November, posting a month-on-month increase of 0.8% rather than the 0.3% gain anticipated.
The Kansas City Fed Manufacturing Index did drop from 8 to -2 in January, but the ‘Greenback’ continued trending strongly.
GBP/USD Forecast: UK Retail Ahead
Tomorrow the Pound could extend losses against the US Dollar if the UK’s retail sales report comes in at expected levels.
Retail sales are believed to have dropped by -0.7% on the month in December following the black-Friday inspired surge of 1.7% recorded in November.
On the year, retail sales are expected to have decreased from 6.9% to 3.4%.
EUR/GBP Exchange Rate Could all on EU PMI
The Pound could advance further against the Euro tomorrow if the Eurozone’s Manufacturing PMI’s point to ongoing weakness in the currency bloc’s manufacturing sector.
The US Markit Manufacturing PMI is the week’s most influential report for the world’s largest economy and could prompt notable GBP/USD movement before the weekend.