British Pound to Euro and US Dollar Exchange Rate Forecast – GBP/EUR, GBP/USD Movement Limited before BoE Minutes
With influential economic reports for the UK in short supply until later in the week, movement in the British Pound to Euro (GBP/EUR), British Pound to US Dollar (GBP/USD) and British Pound to Indian Rupee (GBP/INR) exchange rates was due to global economic developments on Monday.
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British Pound to Euro (GBP/EUR) Exchange Rate Gains 0.3%
On Friday the GBP/EUR exchange rate spent most of the European session trending above the 1.30 level as the UK’s solid employment number gave the Pound a boost against a number of its peers.
However, intimations that Greece is willing to compromise in its renegotiation of its austerity deal, coupled with comments from Germany regarding its desire to keep Greece in the Eurozone, saw the Euro recoup losses.
On Monday the British Pound to Euro (GBP/EUR) exchange rate may have held below 1.39, but it was able to post a moderate gain thanks to sub-par ecostats from the Eurozone.
Below-forecast German Producer Price and Eurozone Construction Output figures ensured that the Euro shed some of its recent advance.
The sharp slide in construction output was particularly concerning, and prompted this response from ICIS News; ‘The contraction represents a turnaround from the growth recorded for the previous month, but Eurozone also revised down the extent of January’s output growth for the Eurozone, to 1.6% from earlier estimates of 1.9%. EU production in construction estimates for January were revised down to 0.6% from 1%.’
While the ongoing negotiations between Greece and its creditors is likely to be a driving force behind GBP/EUR exchange rate movement, investors will also be focusing on the German ZEW economic sentiment and current situation numbers.
British Pound to US Dollar (GBP/USD) Exchange Rate Softer, US Durable Goods Orders Ahead
At the close of last week the British Pound to US Dollar (GBP/USD) exchange rate broke through the key technical support level of 1.50 as the UK’s jobs data impressed and mixed US data pushed back expectations for a summer interest rate increase from the Federal Reserve.
Although some economists are still expecting the Fed to hold off adjusting borrowing costs until either the final quarter of this year or the first quarter of next, ‘Cable’ pared gains on Monday.
The US Chicago Fed Nat Activity Index dropped unexpectedly in March, but the result had comparatively little impact on ‘Greenback’ trading.
By far the most influential US ecostat to focus on this week is the nation’s Durable Goods Orders report.
Economists are envisaging a rebound in durable goods from -1.1% to 0.6%. If this fails to materialise, the British Pound to US Dollar (GBP/USD) exchange rate could tumble before the weekend.
The British Pound to Euro (GBP/EUR) exchange rate was trading in the region of 1.3880, the British Pound to US Dollar (GBP/USD) exchange rate was trading in the region of 1.4905.