Pound, Euro and US Dollar Exchange Rate News: BoE Decision, FOMC Minutes, Greek Bailout in Focus

April 6, 2015 - Written by John Cameron

STORY LINK Pound, Euro and US Dollar Exchange Rate News: BoE Decision, FOMC Minutes, Greek Bailout in Focus

Latest Exchange Rate Forecasts for the British Pound, Euro and the US Dollar

The Pound is likely to experience another week of notable movement over the next five days as a number of key releases for the UK, Eurozone and US come under investor scrutiny.

Both the Pound to Euro and Pound to Dollar exchange rates advanced at the beginning of last week as the UK currency was supported by the news that domestic consumer confidence jumped to a 12-year high and the pace of fourth quarter growth was positively revised.

At the time industry expert Jennie Bull said of the confidence data;

‘There has been a notable uptick in overall confidence with more Britons ditching their lunch box and opting for pre-made sandwiches and lunches. This positivity has also spilled over into more expensive items like holidays, with more of us willing to splash out on what may have previously been deemed a luxury.’

However, Sterling proved unable to hold onto gains in spite of an encouraging Markit Manufacturing PMI print and the Pound returned to trending in the region of 1.36 against the Euro and the cusp of 1.48 against the US Dollar as concerns related to the upcoming UK general election severely limited demand. As it stands, no one party appears to have enough support to command a majority vote in May. As this could mean a hung parliament, the risks to the Pound will remain skewed to the downside in the weeks ahead. A comparatively poor UK Construction PMI was also responsible for the Pound’s declines towards the tail end of the week.

Although the furore surrounding the UK election will be driving much of Sterling’s movement next week, the British currency’s relationship with both the Euro and the US Dollar will be affected by the UK’s Services PMI and the Bank of England’s (BoE) interest rate decision.

While the BoE announcement is likely to be fairly predictable, and therefore unlikely to inspire much volatility, the services report has the potential to push the Pound either higher (if it shows improvement) or lower (if the gauge declines).

The GBP/EUR exchange rate will also be sensitive to any developments in the Greek bailout negotiations.

If the Hellenic nation’s creditors approve the list of reforms Greece has submitted it would bolster the Euro, but signs that Greece and Russia might join forces would be Euro negative.

Pound Sterling vs Dollar Exchange Rate Forecast

Meanwhile, the Pound to US Dollar exchange rate will no doubt fluctuate as the Federal Open Market Committee policy meeting minutes are issued. The minutes could reiterate the fairly dovish commentary offered in the Fed statement, and if that proves to be the case we may see the ‘Greenback’ edge lower across the board.

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