The British Pound to US Dollar rate fell back from its multi-week best last week and failed to recover on Friday as USD benefited from Yellen's hawkish commentary. Sterling remains on the back foot according to a majority of leading technical forecasts.
- The Pound to Euro exchange rate today: 1 GBP = 1.17323 EUR, down from best of 1.1954 (30 days)
- The Pound to Dollar exchange rate today: 1 GBP = 1.31357 USD, monthly best was 1.55% higher at 1.3342.
After much speculation that Janet Yellen would give a hawkish indication of the future path for US monetary policy, the Fed Chair has instead disappointed markets with a more balanced view, allowing GBP/EUR and GBP/USD to make gains.
The Euro is weakening as well, despite inverse EUR/USD exchange rate correlation, because the European Central Bank (ECB) would like a US rate hike to strengthen the USD, weakening the Euro and lessening the need for them to increase stimulus measures to boost inflation.
Despite Kansas City Fed President Esther George continuing to talk up the possibility of an imminent interest rate hike the appeal of the US dollar (USD) exchange rates has remained muted on Friday morning.
Commentary from Bank of England Deputy Governor Minouche Shafik could provoke volatility for the Pound, providing the policymaker offers some fresh indication on the bank’s policy outlook.
Hawkish comments from a member of the FED has combined with strong domestic data to see foreign exchange investors daring to hope for a hawkish outlook on US monetary policy from Janet Yellen tomorrow, boosting US Dollar exchange rates.
Robert Kaplan has said that the case for tightening monetary policy was increasing and that the Fed could hike rates in the near-term.
The Pound has seen its luck run out against its peers on Thursday, with the previous three day’s gains being replaced with widespread losses.
The source of this downfall for Sterling has ironically been positive domestic data, with the Confederation of British Industry (CBI) distributive trades result for August rising from -14 to 9.
The negative implications behind this news, however, have been that while gradual, there are still signs that the UK’s retail sector is slowing down and could be expected to crash when Article 50 is eventually triggered sometime in 2017.
Here are today’s live exchange rates:
On Thursday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.858
Today finds the pound to euro spot exchange rate priced at 1.166.
The pound conversion rate (against us dollar) is quoted at 1.249 USD/GBP.
At time of writing the pound to canadian dollar exchange rate is quoted at 1.712.
NB: the forex rates mentioned above, revised as of 25th 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.
Pound to Euro Exchange Rate Forecast: Losses Possible on Tomorrow’s UK Investment and GDP Results
So how will Pound (GBP) exchange rates perform as the weekend approaches?
The last day of the week will bring a number of high-impact UK ecostats, with two of the three are expected over the morning.
These will cover preliminary Q2 business investment, as well as the Q2 second estimate for the GDP growth rate. Predictions have been for falling investment on the quarter and year, but for the growth rate to rise over the same fields.
Final input from the UK will come on Friday afternoon, when Bank of England (BoE) official Nemat Shafik gives a speech at the US Jackson Hole Symposium. While speaking as a member of the BoE, there is no guarantee that Shafik will comment on future UK monetary policy.
US Dollar (USD) Exchange Rates Fluctuating against Peers like GBP ahead of Major Jackson Hole Meeting for Fed Officials
The US Dollar exchange rates have made conflicting movements today, having been unsettled ahead of a major meeting of minds between global central bankers.
The event in question is the Jackson Hole Symposium, which will bring together both Fed and international central bankers to discuss future policy decisions and the global economic situation as a whole.
US domestic data releases have seen continuing jobless claims in August fall and durable goods orders in July rise, though this positivity has only further agitated investors who are in tense anticipation about whether hawkish or dovish remarks will come from Fed Chair Janet Yellen.
What Next for USD? Jackson Hole Symposium, Yellen Remarks and US GDP Results Ahead
While the Symposium is scheduled to open tonight and run until Saturday, the key Fed Chair speech isn’t expected to take place until 4pm on Friday.
Ahead of that time, the US Dollar could be influenced by speeches from lesser Fed officials at the Symposium, as well as US economic data such as GDP growth rate results for the second quarter.
The Q2 second GDP estimates are expected to rise on the quarter and the year, while the University of Michigan finalised August confidence score has been forecast to rise from 90 to 90.4.
Long-Term UK Economic Forecast: Pantheon Macroeconomics’ Tombs sees Declining Spending in Future
While the earlier UK retail sales stats were much better-than-expected, economists were quick to make more extended forecasts about how UK economic performance might pan out if present market trends continue.
Looking at the big picture, Pantheon Macroeconomics Economist Samuel Tombs said:
‘Away from the high street, there are clear signs that [consumer activity is] slowing down - falling new car registrations and declining mortgage approvals show households are shying away from big-ticket purchases’.