Pound Sterling (GBP) Exchange Rate Falls against Euro, US Dollar
As the European session progressed the Pound declined by over 0.1% against both the Euro (GBP/EUR) and US Dollar (GBP/USD).
Although Bank of England (BoE) Governor Mark Carney used today’s testimony to reiterate points raised in both the BoE meeting minutes and inflation report, the hawkish elements of his comments lent Sterling little support.
Carney argued that the decline in inflation is temporary and that CPI will return to the BoE’s target within two years.
The central banker also reiterated that the central bank’s policy focus is towards tightening, but that interest rates could be cut if the fall in inflation becomes entrenched.
Monetary Policy Committee member Martin Weale then stated that it may ‘be appropriate to raise Bank Rate rather earlier than financial markets currently anticipate.’
However, with the focus so firmly on Greece and today’s speech from Federal Reserve Chairwoman Janet Yellen, the Pound failed to gain on either of its major peers.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3619
Earlier…
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast – Greek Reforms under Consideration
The Pound Sterling to Euro (GBP/EUR) exchange rate pushed back above the 1.36 level on Monday and extended gains after Greece missed its deadline for submitting a draft list of reform proposals.
The Hellenic nation has since presented its proposal but will need the approval of the Eurogroup before it is granted a four-month extension of its current bailout programme.
The Euro is likely to remain under pressure until the Greek situation stabilises.
Today’s German fourth quarter growth data had little impact on the Euro despite confirming a sturdy 0.7% pace of expansion in the three months through December.
Economist Andreas Rees said of the GDP report; ‘Powerful trickle-down effects from a lower oil price and a weaker Euro exchange rate continued to lift the German economy. It is hard not to be reasonably optimistic in Germany these days.’
In the hours ahead, the GBP/EUR currency pair could push higher still if Bank of England (BoE) Governor Mark Carney adopts a hawkish tone in his testimony to Parliament.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3651
Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast – British Pound Broadly Stronger before Carney Comments
After softening at the start of the week, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate recovered losses on Tuesday.
Speculation that today’s testimony from BoE Governor Mark Carney could see interest rate hike expectations brought forward was lending the British currency support and Sterling was trading in a stronger position against several of its peers.
The Rupee was, however, able to advance on the US Dollar early in the European session.
Concerns that today’s speech from Federal Reserve Chairwoman Janet Yellen could imply that borrowing costs will be left at record lows for longer kept the ‘Greenback’ under pressure.
Demand for the US currency was also undermined by the recent run of mixed economic reports for the world’s largest economy.
Given that Indian data is in short supply this week, global economic developments and commodity price shifts will be dictating the direction taken by the Rupee in the days ahead.
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate was trading in the region of 96.1980
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast – Sliding Oil Drags ‘Loonie’ to a 6 ½ Year Low
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate surged to a fresh six and a half year high on Monday as the price of crude oil (Canada’s main export) fell back below $50 a barrel.
Last week’s concerning domestic retail sales report also contributed to the Canadian Dollar’s weakness, as did the expectation that this week’s Canadian Consumer Price Index will show a marked decline in inflation.
The ‘Loonie’ softened against the US Dollar as well as the Pound and Euro, but was able to advance by 0.6% against the New Zealand Dollar after the Reserve Bank of New Zealand cut its two year inflation expectation – upping the odds of interest rates remaining on hold in the South Pacific nation.
Later today Bank of Canada (BOC) Governor Stephen Poloz is due to speak. If he hints that further interest rate cuts are on the horizon, the ‘Loonie’ may fall further still.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trading in the region of 1.9507
