More Pound to Dollar Exchange Rate (GBP/USD) Gains Forecast, Pound to Euro Rate (GBP/EUR) Stays Strong

May 2, 2014 - Written by David Woodsmith

STORY LINK More Pound to Dollar Exchange Rate (GBP/USD) Gains Forecast, Pound to Euro Rate (GBP/EUR) Stays Strong

Yet more gains are forecast for the Pound Sterling to Dollar exchange rate, which stands at 1.68831 GBP/USD. The Pound Euro exchange rate holds steady at 1.21806 GBP/EUR.

Yesterday morning brought the news that the International Monetary Fund had approved a massive $17.1bn bailout aimed at shoring up Ukraine’s broken finances. The Greece-style emergency payment is to be delivered in instalments over the next 24 months which are dependent upon the troubled Eastern European nation hitting tough targets on tax hikes and increases in the domestic retail price of energy.

Although Ukraine is not yet a member of the 27 strong European Union club, the fortunes of the aspirant member state have a marked effect on the eurozone for both geographical and political reasons; the EU holds a strong desire for a prosperous and stable Ukraine which it values as an important partner geographically and strategically.

The latest Pound Sterling to Euro and US Dollar exchange rates are as follows:

- The Pound Sterling to Euro exchange rate is trading value +0% at 1.21806 GBP/EUR.
- The Pound Sterling to US Dollar exchange rate is trading down -0.07% at 1.68831 GBP/USD.
- The Euro to US Dollar exchange rate is trading down -0.07% at 1.38607 EUR/USD.

Price action for the Pound euro exchange rate (GBP/EUR) during yesterday’s session suggests that the market remains far from convinced that the Kiev administration will be able to stick to the terms of its bailout. The Sterling Euro pair climbed to close to the 1.2200 GBP/EUR threshold during the European trading session as the single currency struggled to assert itself against the Pound. Significantly though, the pair remained below its 16-month high of 1.2258. The longer the Pound to Euro exchange rate holds below this key level of resistance the more likely a technical retracement becomes; this immutable law of the markets has led many analysts to forecast that the next move for GBP EUR will be to the downside.

Looking ahead to today’s session, the main event of the day comes this afternoon in the States with the publication of the latest set of US job creation numbers. Economists are looking for a print of over 200,000 following last month’s disappointing counterpart numbers. The Dollar appears to be in a precarious situation – if the key jobs number once again disappoints, then it is likely to give up further ground against the other majors. Meanwhile, a strong employment figure is far from guaranteed to help the Buck given the Federal Reserve’s apparent determination to continue with its Quantitative Easing programme until the latter part of 2014. Analysts are predicting that the GBP USD exchange rate could improve upon the 5+ year high which it struck yesterday.

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