GBP EUR Rate Dips, GBP USD Rate Forecast To Follow Suit

Modified: Thursday, 16 May 2013 16:04 BST - Written by James Fuller

STORY LINK GBP EUR Rate Dips, GBP USD Rate Forecast To Follow Suit

Yesterday afternoon’s session in the currency markets provided one of the most surprising headlines of the year – leading credit ratings agency Fitch announced that it had UPgraded the credit rating of long-term debt struggler Greece from CCC to B-. The development was not just good news for the Hellenic state, but also for the eurozone as a whole. The Pound euro exchange rate (currency : GBP EUR) dipped as a consequence, making a brief visit down into the 1.1700s during the latter part of yesterday’s afternoon session.

Elsewhere, yesterday brought more bad news from Britain’s retail banking sector, with UK based banking giant HSBC revealing that it is set to shed a further 14,000 jobs from its vast global operation. The rationalisation of recent times in this key sector of Britain’s economy held back the Pound on the day, making sure any gains for the UK tender against the other majors were limited.

Meanwhile, yesterday afternoon’s Crude Oil Inventories figure in the States, which showed a far larger than anticipated weekly drop in reserves of black gold, can be taken one of two ways. Looking at this from a ‘glass half empty’ perspective, it shows the current low level of American oil extraction, meaning that economic participants in the world’s leading economy remain highly dependent on the global oil market for their continued prosperity.

Looking at the figure in a more positive light, the fact that the US is having to deplete its reserves would appear to be a sign that activity in the world’s premier economy is firmly on the up. The Pound to US Dollar exchange rate (currency : GBP USD) has made pronounced losses throughout this week’s session; the pair briefly dropped into the 1.5100s late yesterday as investors adjusted their positions to factor-in a higher chance of a winding down of Quantitative Easing in the short term. It seems unlikely that GBP USD’s recent losses are at an end yet.

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