Pound Sterling to Euro (GBP/EUR) and US Dollar (GBP/USD) Exchange Rate Forecast to Edge Higher as Cameron Pushes for EU Reforms
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.24% on Thursday afternoon and the Pound Sterling to US Dollar (GBP/USD) exchange rate strengthened by around 0.15%.
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As British Prime Minister David Cameron addresses European Union officials on the reformation of the UK’s membership with the EU, the Pound edged higher versus its major peers. Should Cameron succeed, the Pound is likely to rally as Euro sceptics would have less fodder to argue against continued membership.
The Euro, meanwhile, slumped versus its rivals after it became clear that a deal would not be reached between Greece and creditors today. Yet another emergency meeting has been scheduled for Saturday, but the lack of progress thus far is weighing on confidence that the gaps can ever be bridged.
The US Dollar, meanwhile, softened versus many of its peers despite registering positive results from labour market data. The depreciation can be attributed to slower-than-expected growth in the services sector which accounts for a large portion of US Gross Domestic Product.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4054.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5732.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Gain as Greek Struggles Continue
Although the solitary domestic data publication showed British retail sales slumped in June, the Pound strengthened versus some of its peers. The appreciation can be linked to speculation that David Cameron will persuade EU officials to reform the UK’s membership in the EU. This positive sentiment has the potential to be short-lived, however, given that history shows that deals in Europe are not speedy affairs.
Meanwhile, the Euro softened versus many of its currency rivals in response to another day of meetings which has seen no progress towards Greece unlocking aid. Many officials are going as far to say that the situation has worsened. There has been yet another emergency meeting scheduled on Saturday in which Greek officials will attempt to find a compromise with the International Monetary Fund (IMF).
The Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Fluctuate on Euro-Area Officials Comments
The Pound Sterling to Euro (GBP/EUR) exchange rate is likely to fluctuate over the course of Friday’s trade with a lack of influential data to provoke movement. Expect many comments from European and Greek officials which have the potential to rock the boat.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3985 – 1.4079.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Edge Higher as US Services Growth Slows
A comparatively positive set of US labour market data publications was micrified by a disappointing result from US services data. The preliminary figure for June’s Services PMI was forecast to increase from 56.2 to 56.5, but the actual result dropped to 54.8. This was particularly disappointing given that US services accounts for a large proportion of Gross Domestic Product.
Commenting on the flash PMI data, Chris Williamson, chief economist at Markit said; ‘While the surveys point to the economy growing at an annualised rate of around 3% in the second quarter as a whole, there has clearly been a loss of momentum in recent months. With June also seeing one of the smallest increases in new orders recorded over the past two years, the surveys suggest that GDP growth could slow appreciably in the third quarter.’
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Hold Gains ahead of University of Michigan Confidence
Given the absence of further domestic data publications to curb the trend, and with futures traders delaying bets as to the timing of a Federal Reserve interest rate increase, the Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to hold gains ahead of US data due for publication on Friday afternoon.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.5673 – 1.5771.