The British pound to dollar conversion rate (GBP/USD) weakened for a second day on Wednesday and sterling's recent corrective recovery appears to have lost momentum versus the Euro (EUR) as well with concerns over a Brexit never far away.
While Friday's UK construction output stats could have printed better, the British pound to euro exchange rate nonetheless managed to appreciate regardless.
In the case of the pound to dollar conversion rise, this was because of a disheartening outcome to the University of Michigan confidence score, which fell by a few points.
After a rocky Thursday on the foreign currency markets, the British pound exchange rates received a boost today.
On Friday morning the Office for National Statistics reported that house building surged by 6.8% in the three months to February, its best increase to date.
As a result construction output was shown to have grown 1.5% over the period, offering further encouragement of a robust UK economy and boosting the pound to euro exchange rate.
Other Pound Sterling / Currency Exchange News
Latest Pound/Euro Exchange Rates
On Saturday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.856
Today finds the pound to euro spot exchange rate priced at 1.168.
Today finds the pound to us dollar spot exchange rate priced at 1.249.
The GBP to CHF exchange rate converts at 1.142 today.
NB: the forex rates mentioned above, revised as of 27th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
The appeal of the British pound continued to remain low on Thursday, due to the day’s UK News offering no respite
Sterling has remained soft against the euro, US dollar, Australian dollar and Canadian dollar currency peers today, due to earlier concerns voiced over the UK economy.
These have primarily focused on the now-routine rate freezes of the Bank of England (BoE), although others have also been chipping in about the looming UK Referendum vote date.
In an unsurprising development the Bank of England (BoE) voted to leave interest rates at their record low of 0.50% for the 85th month in a row.
The appeal of the Pound (GBP) was further weakened by the indication that policymakers are highly unlikely to consider a change in monetary policy until after June’s EU referendum, once again noting the negative impact that uncertainty has been having on domestic data.
UK House Prices Fall Unexpectedly, Pound Sterling (GBP) Exchange Rates Edge Lower
The British pound weakened overnight as the RICS House Price Balance showed house prices unexpectedly dropped to a nine-month low in March.
With many economists predicting the BofE will leave its key rate at a record-low 0.5 percent, sterling investors may focus on anything in today's MPC meeting minutes that hints at an earlier interest rate hike.
EU referendum uncertainty continues to negatively impact the British pound on today's foreign exchange markets.
Investors have not yet priced-in Brexit concerns on the euro, but the single currency could potentially decline as we draw closer to the June 23rd vote.
Soft US retail sales has not been enough to offset US dollar exchange rate gains ahead of key inflation data.
Pound to Dollar Exchange Rate Descends from Previous Best
The GBP to USD exchange slipped back from a high the previous day of 1.43 to a low of 1.4089, a sharp reversal ahead of today’s Bank of England interest rate announcement and accompanying minutes.
The pound sterling to euro rate peaked above 1.26 GBPEUR yesterday and lost 0.5% to a low of 1.2528, as investors predict the BoE will reiterate concerns over the impact of Brexit on the UK economy.
Growth in the key sectors of manufacturing, construction and services has slowed during the first quarter of the growth with the economy is expected to grow 0.4%, compared with 0.6% in the final three months of 2015.
A slowing economy combined with lacklustre inflation and the uncertainty surrounding the referendum has seen the Pound decline in value significantly this year and there is a higher probability that the trend will continue over the coming weeks.
Sterling also weakened last night after a report showed that a gauge of UK house prices unexpectedly dropped to a nine-month low in March.
With analysts forecasting that the BoE will leave rates unchanged again today the focus will inevitably be on the minutes of the meeting and whether officials discussed looser monetary policy to counter the potential economic downturn of quitting the EU.
The debate will rage over the coming weeks with politicians arguing over the impact should we stay in or if we leave but many economists agree that the Pound will be vulnerable to further losses regardless of the result.
After three days of recovery for the Pound, the likely dovish tone of the BoE minutes could prompt a renewed bout of Sterling selling.
US Dollar (USD) Exchange Rates Climb despite Weaker-than-Expected Retail Sales
Elsewhere yesterday, concerns over the outlook for the U.S economy increased after a report from the Commerce Department showed that retail sales unexpectedly fell in March.
Sales were down 0.3% after being unchanged in February, sparking concerns that growth is slowing in the world’s largest economy. The core retail sales date correspond most closely with the consumer spending component of gross domestic product and the sales result for March was expected to show an increase of 0.3%.
Today, the focus in the U.S will be on the latest inflation data for March, which is expected to show an increase of 0.2% with core inflation unchanged at 2.3% year-on-year.
Euro to Pound Exchange Rate Forecast
Lloyds, in their most recent briefing to clients, warn of a significant top for the EUR/GBP:
"We have highlighted that we are on high alert for a significant top developing in the 0.81-0.82 region and a decline and close through this support region would start to add conviction that top is developing/in place. While over this support the underlying trend remains intact, with 0.8005/20 intra-day resistance."
GBP,EUR,USD Related Data Released 14th April 2016
EU 10:00 Final HICP (March) (source)
U.K 12:00 BoE Interest Rate Announcement (source)
U.S 13:30 CPI (March)
- Ex Food & Energy
U.S 13:30 Initial Jobless Claims (w/e 9th April) (source)