Pound Euro Exchange Rate Forecast To Climb, GBP USD Trades Higher

Modified: Thursday, 25 July 2013 17:07 BST - Written by John Cameron

STORY LINK Pound Euro Exchange Rate Forecast To Climb, GBP USD Trades Higher

Yesterday afternoon’s session was notable for a brace of US data releases which proved to have a marked effect on the Pound Dollar exchange rate (currency : GBP USD). Last month’s US Durable Goods Orders and the latest weekly Initial Jobless Claims figures were released concurrently at 1330hrs BST and they sent out slightly mixes messages regarding the state of the real economy in the US.

The American Durable Goods Orders number showed at 4.2% versus analysts’ expectations of a print of 1.4%. The figure provides a key indicator regarding confidence levels in the US economy – it shows the increase / decrease in the volume of purchases of goods expected to last for at least three years by American economic participants. An sharp increase in the level of such ‘big ticket’ purchases is taken by analysts as a sign that businesses and individuals are feeling more optimistic regarding the future prospects of the world’s largest economy, so yesterday’s strong reading hinted that the US economic picture is set to brighten during coming months. The upshot saw the GBP USD exchange rate recover from an intraday low of 1.5260 up to a far more respectable 1.5334 just after the UK equities session ended.

The slight weakening of the Buck after 1330hrs BST yesterday was primarily attributable to a slightly tame American Initial Job Claims figure. The future continuance of the Federal Reserve’s Quantitative Easing programme remains dependent on an improvement in conditions in America’s labour market. Yesterday’s jump in the number of unemployment benefit claimants in the US from 336,000 the preceding week suggests that such an occurrence remains a way off.

A light data schedule for today means that price action for the Pound Sterling to Euro exchange rate remains tethered to investors’ thoughts regarding the next move from the Bank of England and the European Central Bank. With market rumours persisting that the ECB is set to cut the eurozone’s interest rates, perhaps even temporarily into negative territory, a bout of upside for the Pound Euro exchange rate (GBP EUR) remains a distinct possibility.

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TAGS: American Dollar Forecasts Daily Currency Updates Dollar Po Forecasts