Exchange Rate Forecast – Pound (GBP) and Euro (EUR) Weaker Today, Rand (ZAR) Up
Pound Sterling (GBP) Exchange Rate Forecast
The Pound Sterling exchange rate hit fresh lows against the majority of its currency counterparts on Wednesday following the publication of the UK’s less-than-ground breaking average weekly earnings data and the Bank of England’s pretty pessimistic Inflation Report. Given that today’s RICS House Price Balance figures also disappointed, it’s unsurprising that the Pound hasn’t recovered losses today. Sterling came under additional pressure as a member of the Monetary Policy Committee spoke out in favour of leaving interest rates at record lows for some time to come. Today the Pound Sterling exchange rate could experience volatility in response to the release of UK second quarter growth figures. The growth data is expected to show quarter-on-quarter expansion of 0.8%. Anything less than this would leave the Pound in an even softer state before the weekend. The Pound Sterling to Euro exchange rate is currently trending in the region of 1.2471 having fallen below 1.25 yesterday.
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Euro (EUR) Exchange Rate Forecast
The Euro exchange rate weakened against several of its most traded currency counterparts on Thursday as investors balked at the Eurozone’s poor growth figures. Both the French and German economies failed to perform as expected, with the French economy stagnating in the second quarter and the German economy contracting by -0.2%. The Eurozone as a whole also stagnated in the second quarter of the year. Expansion of 0.1% had been hoped for. In the opinion of economist Peter Vanden Houte; ‘Today’s figures show that the upturn remains too weak to withstand external shocks […] meaning that GDP growth will probably remain stuck in stop and go mode.’ There are no economic reports scheduled for the Eurozone so the Euro exchange rate is forecast to continue trending in its current range.
Canadian Dollar (CAD) Exchange Rate Forecast
Although the price of Brent crude oil, an integral Canadian export, weakened on Thursday the Canadian Dollar exchange rate was trending in a stronger position against the Pound. The commodity-driven asset was supported by on-target How Housing Price figures and was able to outperform its struggling British peer. On Friday Canada’s Manufacturing Shipments and Existing Home Sales data is due for publication. We forecast that if the UK’s GDP fails to impress and the Canadian data prints in line with or above expected levels the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate could end the week lower.
South African Rand (ZAR) Exchange Rate Forecast
While Wednesday’s South African retail sales data failed to impress, the South African Rand surged against the Pound, and the GBP/ZAR pairing hit a low of 17.5240 on Thursday. Meanwhile, the US Dollar to South African Rand exchange rate fell to a two week low as lacklustre advance retail sales data for the US and disappointing initial jobless claims data took a toll on the ‘Greenback’. South African Mining Production data also showed less of a decline than economists anticipated. We forecast that the South African Rand (ZAR) exchange rate could continue trending in its current ranges until after the weekend.
Stay tuned for all the latest currency news and exchange rate forecasts!