Pound Sterling (GBP) Exchange Rate Forecast to Soften on Profit Buying, GBP/EUR and GBP/USD Trending within a Tight Range
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Trend within a Limited Range as Euro-Area Nations Vote on Greek Bailout Terms
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a narrow range on Wednesday afternoon.
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Despite a complete absence of domestic data to stimulate changes, the Pound softened versus many of its currency rivals. This is due to traders locking profits after Tuesday’s surprise upswing in inflation caused the British asset to surge across the board; opening up some very attractive selling opportunities. A hawkish comment from Monetary Policy Committee (MPC) member David Miles wasn’t enough to provoke a fresh Sterling uptrend due to the fact that Miles will no longer be a member of the MPC when it comes time for the Bank of England (BoE) to make its next policy decision.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4199.
As traders await news as to how the German MPs voted on the terms of Greece’s third bailout, the Euro softened. The depreciation is not reflective of concerns that the currency bloc’s most powerful nation will vote against the terms, but rather as a result of fears that Greece will not unlock aid in time to repay the European Central Bank (ECB) tomorrow. Mixed results from European economic data also weighed on demand for the common currency.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the range of 1.4155 to 1.4209 during Wednesday’s European session.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to trend within a Tight Range ahead of US Inflation Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate was holding at opening levels on Wednesday afternoon.
For the remainder of the week, the Pound is likely to see fluctuations versus its major peers thanks to increasingly divergent opinions as to the timing of a BoE benchmark rate increase. With the British central bank stating that rate changes would be subject to domestic data, each report comes with the potential to provoke Sterling swings. Thursday’s British Retail Sales and Friday’s Central Government NCR, Public Sector Net Borrowing, PSNB ex Banking Groups and Public Finances will all have the potential to ignite Sterling movement.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5660.
The US asset is likely to see significant movement in the later-half of the European session and into the North-American session on Wednesday. This is because inflation data is due for publication, with Consumer Prices forecast to improve in July. In addition, the Federal Open Market Committee (FOMC) meeting minutes will be published. A hawkish tone will provide hawks with fodder to bet on a September rate hike which would cause the US Dollar to rally versus its major peers.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5654 to 1.5697 during Wednesday’s European session.