Pound Sterling to Euro (GBP/EUR) Exchange Rate Trending Below 1.39 on UK Inflation Slip, ECB to Increase QE, GBP/USD, GBP/CAD Fall
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast
The Pound Sterling to US Dollar (GBP/USD) exchange rate fell significantly on Tuesday after the UK’s Consumer Price Index (CPI) fell into deflation. The non-core CPI dipped to -0.1% in April after forecasts had expected the figure to remain flat at 0.0% while the core inflation gauge softened from 1.0% to 0.8%, again disappointing stagnation forecasts.
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Later in Tuesday’s European trading, US Building Permits and US Housing Starts data will be available and are predicted to cause some moderate US Dollar exchange rate movement. However, Wednesday could be an extremely interesting day for GBP/USD trading with the publication of both the Bank of England (BoE) and US Federal Reserve meeting minutes which will give an indication on whether policymakers were in favour of interest rate hikes. US inflation data will be out on Friday and is also forecast to create major currency market ripples.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
The Pound Sterling to Euro (GBP/EUR) exchange rate was able to continue trending higher on Tuesday despite gains being hindered after the UK entered deflation territory. However, the Euro has taken a dive against a host of other majors on account of the uncertainty surrounding the situation between Greece and its creditors.
Additionally, the European Central Bank (ECB) announced it would be increasing the pace of its quantitative easing (QE) before the summer.
Policymaker Benoit Coeure commented: ‘The Eurosystem is taking this into account in the implementation of its expanded asset purchase programme by moderately frontloading its purchase activity in May and June, which will allow us to maintain our monthly average of €60 billion, while having to buy less in the holiday period. If need be, the front loading may be completed by some backloading in September when market liquidity is expected to improve again.’
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was also trending lower on Tuesday after UK inflation data fell below forecasts. However, the Canadian Dollar exchange rate may experience some fluctuations later in the session with Bank of Canada (BOC) Governor Stephen Poloz scheduled to speak in Charlottetown. Any dovish comments that could possibly signal another BOC rate cut could see the ‘Loonie’ exchange rate fall.
Friday will be a highly influential day for the GBP/CAD currency pair with the Canadian Consumer Price Index (CPI) out for release.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trending at 1.8904. The Pound Sterling to Euro (GBP/EUR) exchange rate is trading in the region of 1.3852. The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending in the range of 1.5521.