Pound Sterling to Euro Exchange Rate Forecast To Climb, Pound Dollar Prediction To Drop

Modified: Monday, 3 February 2014 10:28 BST - Written by Tim Boyer

STORY LINK Pound Sterling to Euro Exchange Rate Forecast To Climb, Pound Dollar Prediction To Drop

Recent data sets have suggested that activity levels in the Chinese economy are on the wane, and an official government survey published during the early hours of Saturday morning did nothing to dispel this notion.

The Purchasing Manager Index gauge of the state of China’s manufacturing sector last month edged lower to 50.5 from December’s counterpart showing of 51.0. The news was widely anticipated by analysts but came as an unwelcome development for investors holding risk-driven currencies.

As is invariably the case, the New Zealand Dollar is likely to bear the brunt of the disappointing data from the world’s second largest economy due to New Zealand’s heavy dependence upon exports to China. The Pound New Zealand Dollar exchange rate (GBP/NZD) has briefly changed hands above the 2.0300 threshold during recent sessions and the Chinese development is likely to see the pair establish a firm foothold above the psychologically key two to one level. The Kiwi will be given further near-term direction tomorrow night with the publication of Q4 New Zealand unemployment figures. A showing of above Q3’s overall unemployment figure of 6.2% would provide GBP NZD with further forward momentum.

Elsewhere, this week’s session brings a brace of defining risk events for GBP EUR and GBP USD in the form of Thursday afternoon’s post-decision press conference from European Central Bank President Mario Draghi and January’s US jobs numbers which follow 24hrs later. After last week’s eurozone inflation figures, which showed that the rate of price rises in mainland Europe continues to cool, Draghi is likely to be grilled about the potential for deflation in his region. His responses will be key, with any allusion to a QE-style bond-buying scheme for the euro area triggering a sharp move higher for GBP EUR.

Meanwhile, strong labour market numbers in the States will make it highly likely that Janet Yellen’s first policy meeting as chairperson of the Fed will yield another cut to the US Quantitative Easing programme. Look for GBP USD to continue to fall back toward the 1.6000 threshold in such an event.

Important Pound Sterling, Euro & US Dollar Exchange Rates (Updated: 10:30 GMT 03/02/2014)

The Pound Sterling to Euro exchange rate is trading down -0.69% at 1.21024 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading down -0.5% at 1.63549 GBP/USD.
The Euro to Pound Sterling exchange rate is trading up +0.7% at 0.82628 EUR/GBP.
The Euro to US Dollar exchange rate is trading up +0.19% at 1.35137 EUR/USD.

The US Dollar to Euro exchange rate is trading down -0.19% at 0.73999 USD/EUR.
The US Dollar to Pound Sterling exchange rate is trading up +0.5% at 0.61144 USD/GBP.

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