With the British general election drawing ever closer, the Pound Sterling (GBP) exchange rate is likely to fluctuate.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3099.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5160.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 1.8530.
Pound Sterling (GBP) Exchange Rate Forecast to Strengthen on Labour Data
With traders speculating that Wednesday’s labour market data will show improvement, the Pound gained versus most of its major rivals on Tuesday. The UK economy is expected to add 74,000 new jobs in the three months through November. The Unemployment Rate is forecast to tick lower from 6.0% to 5.9%. In addition, Average Weekly Earnings is forecast to improve from 1.4% to 1.7%.
News that the Labour Party is focussing their election campaign on fixing the relationship between the UK and the European Union also supported a Sterling increase.
Thursday’s trading will be dominated by the policy announcement from the European Central Bank (ECB). The vast majority of traders expect some form of quantitative easing, but opinions differ as to the severity of the programme.
‘The market is baying for action from the ECB on Thursday, with expectations now firmly entrenched in favour of a QE announcement,’ said James Ashley, chief European economist at RBC Capital Markets.
The Pound is likely to strengthen if the ECB’s stimulus programme exceeds expectations thanks to more profitable trade. However, if the German opposition causes the ECB to dilute the opening amount, the Pound may soften under the weight of a surging single currency.
Thursday’s British data is unlikely to have any significant impact with focus firmly on European news. However, for those invested in the Pound, the Central Government NCR, PSNB ex Banking Groups, Public Finances and Public Sector Net Borrowing will be of interest.
In addition, Friday’s Retail Sales data is likely to have an impact on Sterling movement.
Pound Sterling (GBP) Exchange Rate Forecast to Fluctuate
Given that there will be several influential domestic data publications with the potential to spark movement; the Pound is likely to fluctuate over the course of the week. This is especially true with the general election fast approaching and with political parties’ campaigns having diverse messages.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending between a low of 1.3090 and 1.3125.
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending between a low of 1.5133 and 1.5179.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending within a range of 1.8428 and 1.8564.
