Pound Sterling Euro GBP EUR Exchange Rate Edges Lower on Nowotny Comments

September 24, 2015 - Written by John Cameron

STORY LINK Pound Sterling Euro GBP EUR Exchange Rate Edges Lower on Nowotny Comments

ALERT: Euro (EUR) Exchange Rate Gains on ECB Comments

European Central Bank Governing Council member Ewald Nowotny stated in a television interview yesterday that he would be reluctant to support any proposal for an increase to the ECB’s €65bn per calendar month Quantitative Easing (QE) programme. Some FX insiders have suggested in recent times that the ECB should broaden and deepen the scope of its QE scheme in an effort to steer the euroland economy away from its current zero inflation funk.

GBP-EUR News: Euro Drives Pound Down from Best Rate

The euro (currency : EUR) bullied the Pound Sterling (currency : GBP) during yesterday afternoon’s session thanks to Nowotny’s comments, sending the GBP EUR exchange rate down from an intraday high of 1.3819 down to 1.3617 as investors factored in a higher perceived chance that the ECB’s near-term bout of policy loosening may be nearing an end.

UK Public Borrowing Weighs on Pound (GBP) to US Dollar, Euro Exchange Rate

Elsewhere, there was bad news for Sterling on Tuesday morning when the latest set of UK government borrowing numbers showed at an above-expected level. The August statistics revealed Public Sector Net Borrowing of £12.1bn last month – over 10% up from the counterpart figure from August 2014. The Office of National Statistics, which publishes the number, laid the blame for the below par showing at the door of decreased income tax revenues – a worrying development for Britain’s new Conservative government.

FX FORECAST: US Durable Goods Predicted to Impact USD to EUR, GBP Trading

Looking ahead, the main data event today comes this afternoon with the publication of August’s US Durable Goods Orders figure. Analysts are anticipating a month-on-month drop of 2.3%, suggesting that US economic participants are becoming less confident in making large ticket purchases. Such an outcome would appear to make a US Federal Reserve interest rate hike a less likely prospect before the end of the year. Expect the Pound Sterling US Dollar GBP USD exchange rate to retrace higher in such a circumstance.

This morning’s German IFO Business Climate survey also has the potential to be market-moving for GBP EUR if it prints outside analysts’’ expected parameters.

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