European Central Bank (ECB) Comments Forecast to Alter Levels on Pound Sterling Euro Exchange Rate GBP EUR

July 10, 2015 - Written by John Cameron

STORY LINK European Central Bank (ECB) Comments Forecast to Alter Levels on Pound Sterling Euro Exchange Rate GBP EUR

Significant Currency Market Movement Forecast for GBP, EUR, USD Exchange Rates

With the Eurozone’s potential Greek tragedy looking to have been averted following a surprisingly comprehensive austerity offering from Athens’ policymakers late yesterday, the focus of market participants has now moved on to next week’s significant data releases. Many insiders forecast that the next seven days could bring significant price action in the markets.

UK Inflation Data to Impact GBP/EUR, GBP/USD, GBP/AUD Forex Rates Next Week

The main event for the week, as far as Sterling-watchers are concerned, comes in the form of the publication of June’s Consumer Price Index data tomorrow morning. The pace of domestic price rises slumped into negative territory earlier in the year as the British economy felt the effect of falling global oil prices. However, most analysts predict that next week’s official figures will point to further forward movement for inflation – such an outcome will reignite market babble regarding a potential interest rate hike from the Bank of England during the first half of next year.

Foreign Exchange Forecast: USD/EUR, USD/AUD, USD/GBP

Meanwhile, Tuesday afternoon brings the publication of the latest Advance Retail sales data in the US. The apparent near-term resolution of the Greek debt crisis has sent the euro US Dollar exchange rate higher this afternoon and this move has sent the Pound Sterling US Dollar exchange rate higher through arbitrage funding. The pair has peaked at an intraday high of 1.5552 since the New York opening bell – a full 2c higher than Wednesday’s 4-week low. Investors holding the US Dollar will also be looking at Friday’s American inflation figures for a further steer on the likely future direction of the Buck.

GBP/EUR could fluctuate on ECB interest rate decision

The main event in Europe next week comes in the form of Thursday’s European Central Bank (ECB) monetary policy decision. Analysts believe it is highly unlikely the ECB will alter the trajectory of its controversial €65bn per month Quantitative Easing programme, especially now that Greece appears to have decided to toe the party line. However, the tone of ECB President Mario Draghi’s press conference which follows will be closely monitored by investors looking for clues on the likely future performance of the euro (currency:EUR).

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