With the negotiations in Greece drawing the world’s focus, the GBP/EUR, GBP/AUD and GBP/USD exchange rates all experienced volatility during the European session.
Pound Sterling to Euro (GBP/EUR) Future Currency Forecast: Sterling Trends at 1.41 before UK GDP, Greece Attempts to Broker Deal to Avoid Grexit
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.41 on Tuesday as European leaders gathered to discuss a bailout proposal which could save Greece from an untimely exit from the Eurozone.
The pairing advanced to a week-high on Monday as the ‘No’ victory in the Greek referendum left investors speculating on whether Greece or its creditors would be the first to concede on key issues in order to help the nation out of its fiscal black hole.
Curiosity surrounding Wednesday’s special UK budget also aided the GBP/EUR pairing’s uptrend.
According to industry expert Kathleen Brooks; ‘If the budget is austerity-heavy, spending-cut heavy, people will start pricing out interest-rate hikes or pushing them further into the future.’ On the subject of Greece, Brooks commented; ‘It’s difficult to know where the market goes from here because we need to hear clearly from both sides, and we won’t hear until the summit.’
The UK’s better-than-forecast Industrial Production and below-forecast Manufacturing Production numbers inspired some GBP/EUR fluctuations on Tuesday, but the Pound could push higher if the NIESR GDP estimate for June reveals accelerating UK growth.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast: Safe-Haven Demand Sees ‘Cable’ Plummet to 1.54
The Pound Sterling to US Dollar (GBP/USD) exchange rate recorded very modest gains on Monday as the US ISM Non-Manufacturing Index Printed slightly below forecast levels.
However, the index did show improvement and according to the report ‘The majority of respondents’ comments are positive about business conditions and the economy.’
The GBP/USD pairing then dropped by more than 1%, hitting a low of 1.5418, on Tuesday as investors flocked to safe-haven assets ahead of the potentially decisive Greek crisis talks.
The US Dollar consolidated gains as US trade data showed that the nation’s trade deficit widened by less-than-expected in May.
As Greece has now announced that it won’t be submitting a reform proposal to creditors until tomorrow, investors are likely to remain wary of higher-risk assets and the US Dollar’s bullish trend could be set to continue.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Down After RBA Holds Interest Rate
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate moved away from its recent over 71-month high on Tuesday despite the ‘Aussie’ broadly softening in a risk-off environment.
The Reserve Bank of Australia (RBA) delivered its latest interest rate decision during the Australasian session and the central bank’s decision to leave borrowing costs unaltered lent the domestic currency a little support.
Investors deemed the statement slightly elusive, although The Wall Street Journal did comment that ‘many economists continue to forecast a further cut in interest rates before the end of the year as low growth, weak inflation, soft confidence levels and weak investment conspire to give the RBA a trigger.’
Current GBP, EUR, AUD, USD Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4122, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5430 and the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.0797.
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