Ahead of the UK’s latest employment figures (due out on Friday) the Pound Sterling to Euro (GBP/EUR) exchange rate was trading in a stronger position, but both the Pound Sterling to Indian Rupee (GBP/INR) and Pound Sterling to US Dollar (GBP/USD) currency pairs registered declines.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Fluctuate on ECB Announcement
After weakening on Tuesday following the release of lower-than-predicted UK core inflation data and an impressive Industrial Production report for the Eurozone, the Pound Sterling to Euro (GBP/EUR) exchange rate recouped losses on Wednesday to achieve a high of 1.39.
While Germany’s final inflation stats for March had little impact on GBP/EUR trading (as they merely confirmed previous estimates) the Euro did come under a little pressure as trade balance numbers for the currency bloc fell short.
On a non seasonally-adjusted basis, the Eurozone’s trade surplus widened from 7.9 billion Euros to 20.3 billion Euros, just shy of the 21.0 billion Euro figure expected by economists.
The Euro was also feeling the pressure ahead of the European Central Bank’s (ECB) policy announcement.
Although the central bank is likely to highlight the positive impact the current quantitative easing programme is having on the Eurozone, it may also refer to the ongoing debt negotiations in Greece and cite this as a potential drag on growth.
UK data is in short supply today, but investors with an interest in the Pound Sterling to Euro (GBP/EUR) exchange rate will be looking ahead to Friday and the publication of the UK’s latest employment figures.
Pound Sterling to Indian Rupee (GBP/INR) Exchange Rate Forecast to Hold Decline before Trade Data
The Pound Sterling to Indian Rupee (GBP/INR) exchange rate lost around 0.25% during the European session as India published its Wholesale Price Index and investors focused on upcoming Indian trade data.
India’s WPI printed at -2.33% in March, year-on-year, down from -2.06% in February and defying predictions for a reading of -1.37%.
The report prompted this response from economist Sujan Hajra; ‘The two inflation data points do increase the chances of a rate cut from the Reserve Bank of India. [By August] the real picture of the monsoon would be clear, as would the timing of a rate hike by the US Fed. And as it is the RBI has already cut twice and transmission is yet to happen.’
However, demand for the Rupee remained as Jayant Sinha, Indian Minister of State for Finance, asserted that if India accepts the policy of full capital account convertibility the nation could become a ‘top global economy’ within a few years.
This week’s Indian trade data is likely to cause additional GBP/INR exchange rate movement (when it’s published that is, the report’s publication date has been moved several times!).
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Trims Gain before US Industrial/Manufacturing Production Report
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced on Tuesday as the odds of the Federal Reserve increasing interest rates in the summer fell slightly in response to a below-forecast US Advance Retail Sales report.
However, sub-par Chinese reports bolstered demand for safe-haven assets overnight and the ‘Greenback’ recouped much of its losses.
In the hours ahead, the Pound Sterling to US Dollar (GBP/USD) exchange rate could gain if US Industrial Production is shown to have fallen in April as projected.
Economists are anticipating a -0.3% dip in industrial output in March and if that proves to be the case, or if the figure comes in below this level, the Pound could rally before the close of trading.
The US NAHB Housing Market Index will also be of interest, as will the publication of the Federal Reserve’s Beige Book.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3898, the Pound Sterling to Indian Rupee (GBP/INR) exchange rate advanced to 92.2970 and the Pound Sterling to US Dollar (GBP/USD) exchange rate is trading around 1.4709.
