Exchange Rates Forecast Today: Pound Euro (GBP/EUR) & Pound Dollar (USD) Lower as BoE Minutes hit Sterling

Modified: Wednesday, 18 June 2014 19:24 BST - Written by John Cameron

STORY LINK Exchange Rates Forecast Today: Pound Euro (GBP/EUR) & Pound Dollar (USD) Lower as BoE Minutes hit Sterling

Foreign Exchange Rates Today - On Monday, the Pound Sterling (GBP) managed to hold recent gains made against the US Dollar exchange rate (USD), however saw a 0.25 per cent slide against the Euro (EUR).

On Sunday, the Deputy Governor of the Bank of England Charlie Bean weighed into the UK interest rate hike argument with comments made during an interview with the Sunday Times newspaper. The BoE policymaker observed that a UK interest rate increase would be, ‘a symbolic step, because it will be an indication that we are on the road back to normality.’

As of 20:00 GMT on 17th June 2014, the global currency markets see the The Pound Sterling to Euro exchange rate trading 0.12pct higher at 1.25205 GBP/EUR, the Euro to Pound rate at at 0.79869 and the Pound Dollar exchange rate 0.13pct lower at 1.69548 GBP/USD.

Bean’s comments backed up Governor Mark Carney’s suggestion last Thursday that a tightening of UK monetary policy might be closer at hand than the markets were currently pricing-in. Neil Jones, head of hedge-fund sales at Mizuho Bank, stressed the potential significance of such a move yesterday, stating that, “the interest-rate differential is causing the pound to perform well against pretty much every other currency, and one can understand why.”

Pound Sterling forecast: UK CPI Inflation data

Looking ahead, the main event today for Sterling-watchers is this morning’s UK CPI inflation print. The future direction of British interest rates is foremost in the minds of investors holding Sterling-denominated assets, with talk of a rate hike before Christmas fuelling the Pound’s near-term improvement.

However, these rumours could be quelled if analysts’ expectations for this morning’s price rise data come to pass; they May CPI number is expected to show a drop in the rate of UK price rises from 1.8% in April to 1.7% last month, with Core CPI dropping from 2.0% to 1.7%. If the data points to such a cooling of domestic inflationary pressures then futures markets are likely to push out their expectations regarding the timing of the next Bank of England interest rate rise.

Pound Euro & Pound Dollar could reach new best exchange rates


Conversely, if the numbers reveal that CPI inflation did not fall back last month, then market whispers regarding a near-term tightening of monetary policy from the Bank of England could rise to fever pitch. In such a circumstance, look for both the Pound euro exchange rate (GBP/EUR) and the Pound US Dollar exchange arte (GBP/USD) to break through to fresh range-topping levels.

Important Pound Sterling, Dollar & Euro exchange rates today - 18/06/2014

The Pound Sterling to Euro exchange rate is trading down -0.26% at 1.24859 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading down -0.11% at 1.69419 GBP/USD.
The Euro to Pound Sterling exchange rate is trading up +0.26% at 0.80090 EUR/GBP.

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