Today's Exchange Rates - Will Pound Sterling to Euro & Dollar Gain on UK Reports?

June 22, 2014 - Written by David Woodsmith

STORY LINK Today's Exchange Rates - Will Pound Sterling to Euro & Dollar Gain on UK Reports?

Exchange Rates Forecast: Will the Pound to Euro & US Dollar Gain on UK Reports This Week? Last week, Sterling (GBP) was able to edge up against the US Dollar, Euro and Australian Dollar (AUD) exchange rates after the release of disappointing central bank minutes. Gains were fleeting and the Aussie came out on top for much of the week.

The start of the week brings mixed results for GBP:

- The pound to australian dollar exchange rate is -0.55 per cent lower at 1.80387.

- The pound to euro exchange rate is +0.09 per cent higher at 1.25349

- The pound to dollar exchange rate is +0.03 per cent higher at 1.70268

On Tuesday the minutes from the most recent Reserve Bank of Australia policy meeting were published.

The minutes showed that policy makers still have some reservations about the Australian economic recovery and that interest rates will be on hold for some time to come.

They stated; ‘Given this outlook for the economy and the significant degree of monetary stimulus already in place to support economic activity, the board judged that the current accommodative stance of policy was likely to be appropriate for some time yet.’ The Australian Dollar to US Dollar exchange rate slid to a one-week low as investors contemplated the minutes.

Australian Dollar trends higher against Pound, Dollar & Euro exchange rates

The Australian Dollar has been trending higher against peers like the Pound, US Dollar and Euro in spite of the RBA’s attempts at talking the currency down.

In the opinion of senior economist Matt Sherwood, nothing short of a rate cut will be enough to drive the South Pacific currency lower.

He stated; ‘The RBA’s war against the Australian Dollar – and its desire to get it lower – has been lost. Indeed, over the past 18 months the bank has been telling us that the Australian Dollar is historically high and is at levels that are tightening fiscal conditions.’

Aussie Forecast: What could cause GBP/AUD Movement this Week?

There are several British economic reports to focus on next week. Monday will see the publication of the Hometrack Housing Survey plus the more influential Nationwide House Price report.

As fears that the UK’s housing market is overheating have had an impact on the fiscal policy adopted by the Bank of England recently, a sign that house prices continued to rise in June could drive the Pound higher. In May house prices were shown to have climbed by a seasonally adjusted 0.7 per cent, month-on-month, and increased by 11.1 per cent on the year on a non-seasonally adjusted basis.

Similarly, Tuesday’s UK BBA loans for house price report will be of interest, and the Confederation of British Industry (CBI) reported sales data is due out the following day.

The measure came in at 16 in May but it is likely that sales declined modestly in June. Thursday’s GfK consumer confidence index will be of interest and a stream of reports are out on Friday, including the Lloyds Business Barometer, British current account numbers, final domestic GDP for the first three months of the year and the UK’s total business investment figures.

If these reports should come in at or above estimated levels, it would add to the cast for the Bank of England adopting a more hawkish stance when it gathers next month and could push the Pound exchange rate higher against rivals like the Australian Dollar, US Dollar and Euro.

Of course, Australian data will also be a driving force behind fluctuations in the GBP/AUD exchange rate. The reports to pay particular attention to include: Australia’s ANZ consumer confidence index (out on Monday), the nation’s skilled vacancies report (out Tuesday) and Australia’s job vacancies report (scheduled for release on Thursday).

As China is Australia’s largest trading partner, news from the Asian nation is also worth noting. The week’s major reports include HSBC manufacturing PMI, China’s conference board leading index, Westpac consumer sentiment and industrial profits figures.

Additional movement in the GBP/AUD pairing could also be triggered by developments in Iraq. If the situation escalates, and puts more pressure on commodity prices, the Australian Dollar exchange rate could decline against Pound Sterling, the US Dollar and the Euro.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts