The British Pound began Wednesday’s European session trading in a stronger position against the Euro (GBP/EUR) and Indian Rupee (GBP/INR) but softer against the Australian Dollar (GBP/AUD) and US Dollar (GBP/USD).
Ahead of the release of the UK’s Services Purchasing Managers Index, the Pound came under a little pressure as a result of the British Retail Consortium’s Shop Price Index. The measure was expected to print at -1.2% year-on-year, but actually came in at -1.7%.
BRC Director General Helen Dickinson had this to say of the result; ‘The fiercely competitive market will see retailers continuingly responding to their customers with keen prices and promotions to maintain market share.’
The UK’s Services PMI then failed to show the level of expansion expected, although it did reveal the second-fastest rate of employment expansion in the history of the survey and a notable rise in new business.
British Pound to Euro (GBP/EUR) Exchange Rate Forecast: Pound Trends Around 1.38, Eurozone Retail Sales Data Impresses
Negatively revised final Services/Composite PMI’s for the Eurozone and its largest economies kept the Euro under pressure on Wednesday.
Reports that the European Central Bank (ECB) is struggling to source the amount of bonds needed to back quantitative easing and persistent ‘Grexit’ fears also weighed on the European asset.
However, gains were trimmed as the UK’s Services Index declined unexpectedly.
The measure dipped from 57.2 to 56.7 instead of climbing to 57.5. The composite gauge held at 56.7.
The Euro then received some support from a report showing a 1.1% month-on-month increase in retail sales. Growth of just 0.2% had been anticipated.
British Pound to Australian Dollar (GBP/AUD) Exchange Rate Forecast: Australian Growth Slows, but Chinese Data Impresses
The British Pound to Australian Dollar (GBP/AUD) exchange rate was trading slightly lower ahead of the release of the UK’s services PMI.
The GBP/AUD pairing dipped during the Australian session even as domestic growth data confirmed a less-than-spectacular rate of expansion.
The Australian economy was shown to have expanded by 0.5% in the fourth quarter, on a quarter-on-quarter basis, following positively revised expansion of 0.4% over the previous three months.
On the year, growth eased from 2.7% to 2.5%.
However, the report did reveal some positives (like sturdy consumer spending) and the Australian Dollar was supported as China’s Services PMI climbed from 51.8 to 52.0.
British Pound to Indian Rupee (GBP/INR) Exchange Rate Forecast – RBI Rate Cut Weighs on Rupee
Although India’s HSBC Services PMI printed more strongly-than-expected, the Rupee declined against peers like the Pound and US Dollar in response to the Reserve Bank of India’s (RBI) decision to cut interest rates.
In a surprise move, the RBI cut the benchmark repurchase rate from 7.75% to 7.5% in response to the government’s decision to grant the central bank a legal mandate to target a 4% inflation rate.
The Indian services measure rose from 52.4 to 53.9, trumping expectations for a figure of 52.07, but had little impact on the Rupee.
The GBP/INR currency pair achieved a high of 95.3230
British Pound to US Dollar (GBP/USD) Exchange Rate Forecast: US Dollar Stronger before ISM Composite and ADP Employment Change Data
Ahead of the release of a run of influential economic reports for the US, the British Pound to US Dollar (GBP/USD) exchange rate was trading in a weaker position.
The pairing softened during the European session as the UK’s BRC Shop Price Index and Services Purchasing Managers Index both fell short of expectations.
The ‘Greenback’ could extend gains against Sterling later today if US ecostats impress.
The ADP Employment Change report is expected to show an increase of 219,000 positions in February while the ISM Non-Manufacturing Composite index is believed to have dipped from 56.7 to 56.5.
Investors will also be taking an interest in the Federal Reserve Beige Book.
The British Pound to Euro (GBP/EUR) exchange rate is trading in the region of 1.3783, The British Pound to Australian Dollar (GBP/AUD) exchange rate is trading in the region of 1.9595, The British Pound to Indian Rupee (GBP/INR) exchange rate is trading in the region of 95.2380, The British Pound to US Dollar (GBP/USD) exchange rate is trading in the region of 1.5342
