UPDATE
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a limited range on Thursday morning, whilst the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate edged fractionally higher by around 0.1%.
Ahead of a crucial EU summit which will see Prime Minister David Cameron address member states in an attempt to persuade them to back his reforms, the Pound Sterling is trending narrowly versus most of its major peers.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4285.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.9553.
Yesterday…
Pound Sterling to US Dollar (GBP/USD) Conversion Rate Forecast to Soften ahead of FOMC Minutes
The Pound Sterling to US Dollar (GBP/USD) exchange rate softened by around -0.2% on Wednesday afternoon.
Market trade has been comparatively subdued today with stock market volatility weighing on investor confidence. As such, domestic data has had a minimal impact on exchange rates. However, the Pound has generally edged lower versus its major peers after labour market data produced a mixed-bag of results. Claimant Count Rate, Jobless Claims Change and Weekly Earnings ex Bonus all bettered the respective market consensuses. However, Unemployment Rate, Employment Change and Average Weekly Earnings failed to impress.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.4268.
As traders await the publication of minutes from the most recent Federal Open Market Committee (FOMC) meeting the US Dollar edged higher versus most of its major peers after domestic data produced mostly positive results. Annual Manufacturing Production, monthly Industrial Production and monthly Building Permits all bettered estimates. However, January’s Housing Starts unexpectedly contracted by -3.8% on the month.
Pound Sterling to Canadian Dollar (GBP/CAD) Conversion Rate Predicted to Dive as Crude Oil Prices Rise
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate dived by around -0.7% on Wednesday afternoon.
In response to the British labour market data, Nick Palmer, a statistician at the ONS stated: ‘While the employment rate continues to hit new highs and there are more job vacancies than ever previously recorded, earnings growth remains subdued and markedly below the recent peak of mid-2015.’
This has caused many to concede that the Bank of England (BoE) will not raise rates any time soon. ‘Even if average earnings growth does pick-up towards 3pc this year in the broader context of the inflationary outlook it seems unlikely to be enough to provoke the Bank of England to tighten policy before early 2017,’ said Sam Hill, an economist at RBC Capital Markets.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.9683.
The Canadian Dollar advanced versus nearly all of its most traded currency rivals today as it tracks oil price gains. Crude has steadily risen as the European session progressed amid hopes that the plans made by Russia, Saudi Arabia, Venezuela and Qatar to freeze output will be successful. However, most analysts are sceptical that the deal will be agreed given that Russia has already stated it will only agree to freeze output if all oil producing nations do the same. Iran has already questioned the logistics of a production freeze so the deal is looking increasingly unlikely even in its infancy.
Pound Sterling Exchange Rate Forecast: EU Summit to Provoke GBP Volatility
On Thursday British Prime Minister David Cameron is due to make a speech at the EU summit. He will attempt to persuade all EU nations to back his proposal for reforming the UK’s relationship with the EU. It is looking unlikely that he will be successful, however, with several nations already voicing concerns. Should he fail to make any significant progress towards reforms the Pound is likely to dive given that those campaigning to leave the EU will be bolstered by the apparent unwillingness to allow the UK to make fundamental changes.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within the range of 1.4233 to 1.4339.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within the range of 1.9690 to 1.9857.
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