Pound Sterling Forecasts vs the Euro and US Dollar for 2015/2016
Forex markets have continued to experience extensive volatility in the last couple of weeks due to central banks catching forex investors and currency analysts by surprise.
The Euro was subjected to further profit-taking.
British reports supported the Pound to Euro exchange rate as the week concluded.
A quick foreign exchange market summary before we bring you the rest of the report:
On Thursday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.859
The pound conversion rate (against euro) is quoted at 1.165 EUR/GBP.
FX markets see the pound vs us dollar exchange rate converting at 1.246.
Today finds the pound to canadian dollar spot exchange rate priced at 1.708.
NB: the forex rates mentioned above, revised as of 25th 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.
British Pound to Euro Exchange Rate Forecast
At the close of the week, the Pound to Euro rate was trading in the region of 1.3316 having posted a modest gain thanks to supportive UK data and disappointing ecostats from the Eurozone.
While UK net consumer credit figures fell flat, domestic Consumer Confidence and Mortgage Approvals numbers beat estimates.
Meanwhile, German retail sales were shown to have increased by less-than-forecast on the month in December (although November’s figures were positively revised).
Separate data showed that the pace of disinflation in the currency bloc worsened in January. However, Euro losses were a little limited as investors engaged in profit-taking.
Next week, movement in the GBP/EUR currency pair could be caused by a number of things.
If Syriza’s attempts to renegotiate Greece’s debt obligations step up a gear, or prompt any provocative comments from European officials, Euro volatility could follow.
Demand for the common currency could also be affected by the week’s big economic reports for the Eurozone.
GBP/EUR Exchange Rate Outlook
Data to be particularly aware of includes the Eurozone’s retail sales figures for the close of 2014, German factory orders, Retail/Construction PMI for Germany and the Eurozone as a whole and German industrial production data.
Although the European Central Bank appears to have exhausted its arsenal of policy adjustments in its quest to support the currency bloc, a marked divergence in the performance of the economies of the UK and Eurozone is still likely to boost the Pound Euro exchange rate.
Pound to Dollar Exchange Rate Forecast
US Dollar bullishness continued this week as the Federal Open Market Committee indicated that it still intends to increase borrowing costs by the middle of this year.
The USD was also supported by the news that the number of people filling for first time unemployment benefits fell to a 15-year low in the week ending January 24th.
The Fed has repeatedly insinuated that higher borrowing costs depend on a strongly performing labour market, so this result was well received.
However, economist Jim O’Sullivan noted; ‘The drop in the latest week is a relief – even if it was exaggerated a little by seasonal policy adjustments.’
The Pound to Dollar currency pair could fall back below the key 1.50 level again this week if the run of North American data supports the prospect of an interest rate hike taking place sooner-rather-than-later.
While Friday’s US Non-Farm Payrolls report is likely to have a major impact on the USD’s performance, there are a number of other influential ecostats which could keep the US Dollar trending higher against Sterling, including the ISM Manufacturing/Non-Manufacturing indexes and Factory Orders.
However, should the UK’s own reports impress, the Pound could recover from recent lows.
While the Bank of England is due to deliver its latest interest rate decision on Thursday, the central bank is unlikely to take any action given the recent slide in inflation and global economic concerns.
The gathering may therefore have little impact on Sterling Euro trading.
The US is also set to publish Markit Manufacturing/Services figures this week. However, these gauges aren’t considered to be as influential as the ISM measures.
GBP/USD Update
The Pound Dollar exchange rate edged off the 1.50 level thanks to a better-then-forecast UK Construction report. The PMI came in at 59.1, compared to market predictions of 56.9 and previous 57.6.