Pound Sterling to Euro, US Dollar Exchange Rate Forecast: GBP/EUR, GBP/USD Slide as Storm Frank Continues to Batter the UK
Pound Sterling is losing ground to most of the major currencies today as Storm Frank continues to cause chaos in Scotland, Northern Ireland and the north of England.
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6,700 homes have been flooded so far as Storm Frank caused river levels to rise, with nine severe flood warnings, 42 amber flood warnings and almost 50 alerts issued across England and Wales since Christmas day. The damage to homes and businesses has caused a bitter row over government spending, with David Cameron having to defend himself against claims of a north/south divide in terms of attention and funding.
The impact of the flooding on Britain’s economy in terms of lost days of trade and curbed consumer spending is expected to exceed £6 billion in the long-term, cutting -0.2% from GDP and potentially throwing into disarray both George Osborne’s attempts to control public spending and the Bank of England’s (BoE) plans for interest rate hikes.
GBP/EUR Exchange Rate Trending Down as Euro Buoyed By Increasing Private Sector Loans
The number of approved loans in the Eurozone in November rose 1.3% year-on-year (YoY) and up from 1% the previous month according to recently released figures. An increase in borrowing is considered to be a good indicator of the health of the economy as businesses look to expand their operations. This in turn creates more jobs and increases business output.
Meanwhile, the M3 money supply – which takes into account all money currently in circulation in the Eurozone, including things such as bank deposits and money market securities – slowed from 5.3% to 5.1% seasonally-adjusted. If the slowdown continues, the situation in the Eurozone economy will be exactly the opposite of what the European Central Bank (ECB) tried to achieve when they cut the deposit rate further into negative territory at their last meeting.
GBP/USD Exchange Rate News: Trader Profit Taking and Thin Trade Not Enough to Weaken US Dollar Against Pound Sterling
The US Dollar is experiencing a languorous end to 2015 as trader profit taking and a thin trading volume keep the ‘Buck’ relatively weak against a basket of currencies. The US Dollar has lagged since the Federal Reserve raised interest rates two weeks ago, although it is still making gains of 0.1% against Pound Sterling and performing well against others, advancing 0.7% against the Norwegian Krone (NOK) and 0.9% on the South African Rand (ZAR).
The US Dollar has been weakened by trader profit taking as it ends the year up more than 5% on Pound Sterling.
Pound Sterling to Euro (GBP/EUR), Pound Sterling to US Dollar (GBP/USD) Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending around 1.3553, with the EUR/GBP exchange rate trading around 0.7376.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trading in the region of 1.4829, while the US Dollar to Pound Sterling (USD/GBP) exchange rate is currently in the region of 0.6744.