British Pound Exchange Rate Forecast: GBP/EUR, GBP/USD, GBP/INR in Tight Range after Pound Rally– Germany Refuses Greek Extension Request
The British Pound to Euro (GBP/EUR), British Pound to US Dollar (GBP/USD) and British Pound to Indian Rupee (GBP/INR) exchange rates remained in a narrow range on Thursday after favourable employment data saw the Pound rally on Wednesday.
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The Euro experienced a mixed day on Thursday when Greece applied for an extension in its current bailout programme and Germany declined the request. The situation between Greece and Eurogroup heads is extremely volatile and tension is building every day.
Industry expert Kathleen Brooks stated: ‘The Greek crisis remains fluid, and the situation continues to change on a daily basis. Yesterday, the outlook was bleak until the ECB stepping in and boosted its emergency lending assistance to Greek banks.’
‘Today the situation improved further on the back of news that the Eurogroup will meet on Friday, which is a sign that Greece may have shifted its negotiating position to a more Eurogroup friendly stance. However, excitement is being contained after Germany said it would reject the deal proposed by Greece in its current form.’
ECB Releases First Ever Meeting Minutes – Greek Negotiations Dominate
In addition, the European Central Bank (ECB) released its first ever meeting minutes on Thursday in an attempt to create greater transparency to the outside world.
The ECB stated that the decision to undertake a period of quantitative easing (QE) was not a unanimous one. Although many policymakers had supported the idea of QE at some point, not all were willing to implement it in March as the central bank has stated it will.
Meanwhile, the US Dollar dropped against other currency majors when the Federal Reserve suggested it wasn’t in a rush to hike rates in the near future.
Many economists had expected an interest rate hike as early as July—however the most recent minutes saw that opinion diminish dramatically.
Thursday’s US Initial Jobless Claims rose by 283K in the week through February 14th—a shade lower than the 290K forecast. However, Continuing Claims stats took the shine off the favourable figure with 2425K jobseeker continuing to claim benefits in the week through February 7th rather than the 2360K prediction.
Wednesday saw the UK labour market improve by leaps and bounds as the Unemployment Rate fell from 5.8% to 5.7%. As a result, investors speculated that the UK could be in line to hike interest rates sooner than forecast.
The Indian Rupee fell by its biggest drop in over a week on Wednesday as importers increased their US Dollar purchases.
Currency and exchange rate expert Ankur Jhaveri commented: ‘The month-end Dollar demand pushed the Rupee lower. Importers are rushing a bit to cover the hedges given that the currency market is shut on Thursday for a public holiday.’
British Pound Exchange Rate Forecast: GBP/USD, GBP/EUR, GBP/INR
The British Pound could be in for some moderate movement on Friday with the release of UK Public Finances, Public Sector Net Borrowing and Retail Sales Stats.
In addition, the US will publish its Markit Manufacturing Purchasing Managers Index (PMI) which could influence the US Dollar to British Pound (USD/GBP) exchange rate.
The British Pound to Euro (GBP/EUR) exchange rate resides at 1.3561. The British Pound to US Dollar (GBP/USD) exchange rate reaches 1.5432. The British Pound to Indian Rupee (GBP/INR) exchange rate is trending in the region of 95.4680.