British Pound Sterling Forecast and Leading Indicators in 2015

September 2, 2015 - Written by John Cameron

STORY LINK British Pound Sterling Forecast and Leading Indicators in 2015

The Pound Sterling (currency : GBP) continued to struggle against the other major global currencies during early trading today. The Pound Euro exchange rate slipped to its lowest level for some time at 1.3530 GBP EUR during early trade, while the Pound US Dollar exchange rate settled back in the 1.5200s.

The mood amongst investors was distinctly risk-off during this morning’s European session as market participants continued to digest Monday’s dismal Chinese manufacturing data which revealed that this key sector of the world’s second largest economy shrank at its fastest pace for three years last month. The losses which followed for global equity markets caused investors to downgrade their expectations for interest rate hikes from the world’s major central banks; because the Bank of England was considered one of the most likely to tighten its monetary policy, the Pound has been hit harder than most.

Ironically, it took a brace of disappointing data sets from the US to improve investor sentiment. The US Federal Reserve’s FOMC meets in two weeks to make its latest interest rate decision. Most analysts believe that there’s a live chance that the Fed will opt to increase its lending rate this month. The relatively poor showing from this week’s private sector ADP Employment Change data and a below-par showing from July’s US Factory Orders data have caused investors to scale back their bets on a Fed rate hike for this month. Appetite for risk improved as a result, with Chicago’s S&P 500 opening up by almost 1.0% and the euroland’s bourses followed suit in tracking higher.

One laggard in the markets today has been the Australian Dollar (currency : AUD) which suffered following domestic Gross Domestic Product data, published overnight. Analysts had forecast that the Q2 figure would show a slight year-on-year drop off in the level of activity in Australia’s commodity-driven economy. The result of 2.0% versus an anticipated 2.2% suggested that the recent fall in commodity prices might further weaken the Aussie moving forward.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Euro Forecasts Pound Sterling Forecasts