GBP/EUR Falls from 1.28 Level, GBP/USD Trends around 1.60
Yesterday the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates came under selling pressure as a result of the UK’s below-forecast Markit Construction PMI.
While the British asset had been bolstered on Monday by an upbeat manufacturing print, the GBP/EUR pairing eased away from the high of 1.28 yesterday. The GBP/USD exchange rate managed to trade just above the support level of 1.60 as the US recorded a wider-than-anticipated trade deficit.
Although the European Commission negatively revised its growth forecasts for the Eurozone and upwardly adjusted its expansion projections for the UK, the Pound softened against the Euro before the close of the European session in response to a provocative report.
According to sources from within the European Central Bank, a large contingent of policymakers are dissatisfied with the leadership of Mario Draghi and will stand against him on the subject of full-scale quantitative easing.
In the view of reporters for Reuters News Agency; ‘Irritation among national governors who hold a majority on the 24-member council could limit Draghi’s space for bolder policy action in the coming months as the bank faces crucial choices about whether to buy sovereign bonds to combat falling inflation and economic stagnation’.
The appeal of the Pound was also compromised by the British Retail Consortium’s (BRC) Shop Price Index.
The gauge fell by -1.9% on the year in October, down from -1.8% in September. A moderate improvement to -1.7% had been anticipated.
GBP/EUR, GBP/USD Exchange Rate Forecast
In the hours ahead movement in both the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates could be triggered by the UK’s Services PMI. A positive print would be Pound beneficial, but a negative result could undermine demand for the currency.
Pound Falls against Euro and US Dollar after Services PMI Softens
During the European session the Pound Sterling to Euro (GBP/EUR) exchange rate weakened by almost 0.2% and the Pound Sterling to US Dollar (GBP/USD) exchange rate shed around 0.7% after the UK’s Services PMI fell short.
Economists had expected the measure of the services sector to ease from 58.7 to 58.5 but it actually dropped to 56.2.
This result dragged to composite index to 55.8 in October from 57.4 the previous month.
Declines against the Euro were moderated as the Eurozone published its own mixed bag of reports, but the GBP/USD exchange rate could extend declines if today’s US ISM Non-Manufacturing report exceeds expectations.
GBP/EUR Claws Back Losses after Eurozone Retail Sales
The Pound Sterling to Euro (GBP/EUR) exchange rate managed to recover from its initial declines after retail sales in the Eurozone were shown to have plummeted in October.
The decline in sales in the currency bloc was the most extensive since the dark days of 2012 and exceeded forecasts for a 0.8% dip.
According to an article published by Yahoo Finance, ‘The largest decline in month-on-month terms was registered in Germany, where retail sales volumes contracted by 3.2% and in France, where they fell by 0.7%. Furthermore, August data was revised downwards from a 1.2% increase versus the prior month to reveal growth of just 0.9%.’
Meanwhile, the Pound Sterling to US Dollar (GBP/USD) exchange rate fell to a 12-month low ahead of the release of influential US reports. The US Dollar was enjoying a bullish relationship with the majority of its peers and if today’s US ISM Non-Manufacturing PMI shows improvement the GBP/USD exchange rate may extend declines.
GBP/USD Trims Losses after Non-Manufacturing Composite PMI
Although the US Dollar’s bullish relationship with several of its major peers was supported by an impressive ADP Employment Change figure, the Pound was later able to claw back some of its recent losses against the ‘Greenback’ thanks to a below-forecast ISM Non-Manufacturing Composite reading.
The index softened from 58.6 to 57.1. A more modest decline to 58 had been expected.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Weakens Despite German Factory Orders Slide
As the European session got underway on Thursday the Pound Sterling to Euro (GBP/EUR) exchange rate declined by around 0.15%.
Sterling edged lower against the common currency ahead of the Bank of England and European Central Bank interest rate decisions in spire of Germany publishing a disappointing factory orders report.
Factory orders were believed to have increased by 2.3% on the month in September but they actually rose by 0.8%. On the year factory orders were down by -1.0%, as expected.
Further GBP/EUR exchange rate movement can be expected in the hours ahead.
Overnight the Pound Sterling to US Dollar (GBP/USD) exchange rate recovered from a 12-month low to achieve a high of 1.6002.
Pound Sterling (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.5962,
Pound Sterling,,Euro,1.2791,
Pound Sterling,,Australian Dollar,1.8598,
Pound Sterling,,New Zealand Dollar,2.0536,
US Dollar,,Pound Sterling,0.6266,
Euro,,Pound Sterling,0.7819,
Australian Dollar,,Pound Sterling,0.5379,
New Zealand Dollar,,Pound Sterling,0.4824,
[/table]
