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Pound Sterling Update: Robust German Inflation Hinders GBP/EUR despite Low Eurozone Growth

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Pound Sterling (GBP) Exchange Rates Hold Firm after Positive Mortgage Data

Pound Sterling (GBP) traded narrowly on Monday following the release of monthly UK mortgage figures, which saw an increase in both approvals and lending over the previous month. This boost enabled Sterling to avoid losses.

A further boost was received from the Europe Business Confidence figures for July, which showed a significant rise in outlook for the UK economy.

Looking forward to today’s session, there is no new UK data of note, meaning anticipation for the Bank of England’s (BoE) interest rate decision on Thursday is likely to continue, with a rate increase of 25 basis points expected.

Pound Sterling Euro (GBP/EUR) Exchange Rate Dips Following Steady German Inflation

The GBP/EUR exchange rate trended lower on Monday after Germany published its latest CPI data.

Investor confidence in the common currency was bolstered as the figures revealed a steady 2.1% inflation rate in Europe’s largest economy, making July the third consecutive month of above-target figures.

Some analysts were prompted to debate whether leaving Eurozone interest rates on hold until summer 2019 is too a dovish a move from the European Central Bank (ECB).

Today, the Euro has a chance to continue its good form if the Eurozone latest quarterly GDP figures exceed expectations, which might compliment the simultaneous release of unemployment figures for June.

Pound Sterling US Dollar (GBP/USD) Exchange Rate Bolstered by Anticipation of Fed Policy Meeting

The Pound Sterling US Dollar (GBP/USD) exchange rate trended higher on Monday, despite rising US Treasury Yields.

Analysts pointed out that this devaluing of the ‘Greenback’ is likely a result of market anticipation of a quiet week from the Federal Reserve.

However, forecasts today suggest that positive inflation figures from the US’s latest monthly PCE Price Index could see the ‘Buck’ bounce back.

Pound Sterling Canadian Dollar (GBP/CAD) Exchange Rate Stable as Crude Valuation Increases

The Pound Sterling Canadian Dollar (GBP/CAD) exchange rate ticked up by half a cent on Monday morning, but fell back soon after following a rise in oil prices.

Crude oil prices went up by more than 2%, boosting the crude-correlated ‘Loonie’. This increase followed news that sanctions on Iran could dent global oil supplies.

Today’s session may see CAD rally with the release of Canada’s GDP data for June, with forecasts expecting an increase of 0.3% over May’s figures.

Pound Sterling Australian Dollar (GBP/AUD) Exchange Rate Slides as Australian Building Approvals see Rise

The GBP/AUD exchange rate took a blow in the early hours of Tuesday morning following impressive Australian building permits figures for June.

The ‘Aussie’ received a boost as the percentage increase of domestic building approvals was brought out of the negative to print at 6.4%.

Pound Sterling New Zealand Dollar (GBP/NZD) Exchange Rate Hindered by Increased Risk Appetite

The GBP/NZD exchange rate dropped by more than half a cent on Monday as a result of investors looking towards risk-correlated currencies in anticipation of central bank meetings scheduled for this week.

The ‘Kiwi’ is expected to decline later today, however, with analysts projecting a fall in domestic employment figures for the second quarter.

 

Further Reading

 

Coronavirus panic drives US dollar strength

Currency rates were extremely volatile last week as the coronavirus situation worsened day by day with various countries implementing ever-tougher measures to stop the spread of the disease.

Last update: 23 Mar, 2020

Coronavirus spread fears linger – USD strong – AUD at 11 year lows

This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.

Last update: 22 Feb, 2020

Coronavirus unnerves currency markets

The strong start to the year for “risk-on” currencies is already a distant memory.

Posted: 3 Feb, 2020

  

Posted to: News

 
 
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.
 

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