Pound Sterling to Euro (GBP/EUR), US Dollar (GBP/USD) Exchange Rate Forecast: US Personal Spending Jumps to 1.4%, Greek Reforms Yet to Materialise
The Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates fell in Monday’s European session despite upbeat UK mortgage data, as political uncertainty shook the British currency.
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The Pound had advanced against a host of other majors early on Monday when UK Mortgage Approvals hit a six-month highs. British mortgages were issued to 61,760 applicants in February—an improvement on the 61,500 forecast and January’s 60,706.
Industry expert Paul Hollingsworth stated: ‘We think that a stronger recovery in corporate borrowing should emerge over the course of this year.’
‘Business optimism remains high and credit is cheap. In any case, with balance sheets awash with cash, weak lending shouldn’t preclude further increases in investment.’
The Bank of England (BoE) announced that a fresh round of stress tests would be undertaken on Britain’s biggest banks in an attempt to evaluate their capability to cope with a fresh global shock similar to that of the Great Recession of 2008. The results of the new stress test are expected to be published in December.
Meanwhile, the Euro has been trading tentatively amid negotiations between Greece and Eurozone financial heads. The Euro could tumble at any moment if the negotiations appear to be going south, and Monday hasn’t begun particularly well with Greece failing to present reforms as promised.
A senior Eurozone official stated: ‘Greece did not submit a reform list on Friday. We look forward to receiving something on Monday.’
US Dollar to Euro (USD/EUR) and Pound Sterling (USD/GBP) Exchange Rates Jump on Fed Rate Hike Outlook
Meanwhile, the US Dollar has been trending higher as a result of Federal Reserve Chairwoman Janet Yellen and her hawkish remarks regarding interest rates on Friday.
The Fed chief stated that interest rates were likely to rise this year, albeit in gradual increments.
Yellen stated: ‘If conditions do evolve in the manner that most of my [Fed] colleagues and I anticipate, I would expect the level of the federal funds rate to be normalised only gradually, reflecting the gradual diminution of headwinds from the financial crisis and the balance of risks I have enumerated of moving either too slowly or too quickly.’
Monday allowed the US Dollar to Pound Sterling (USD/GBP) exchange rate to continue its upward momentum when US Personal Consumption Expenditure rose from 1.3% to 1.4% on the year in February, surprising economists’ forecasts to stagnate.
Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast
The Pound Sterling to Euro (GBP/EUR) exchange rate could fluctuate significantly in Tuesday’s European trading with the release of German Unemployment Rate and Unemployment Change stats.
Meanwhile, the Pound Sterling to US Dollar (GBP/USD) exchange rates could also be in for fluctuations with US Consumer Confidence due out.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trading at 1.4763. The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3639.