Pound Sterling Euro Exchange Rate Forecast Improves

November 27, 2015 - Written by Toni Johnson

STORY LINK Pound Sterling Euro Exchange Rate Forecast Improves

UK GDP Met With Estimates but Failed to Support Sterling Demand

A relatively light day for global data releases made for relatively tight trading ranges for the sixteen most actively-traded currencies today.

The main event this morning came in the form of the second estimate of the latest set of UK Gross Domestic Product data.

The result printed exactly as per analysts’ expectations, revealing that the domestic economy expanded by 0.5% during the three months to the end of September.

Weak UK Construction Output Countered by Positive Services Growth

Performance from the Pound Sterling (currency : GBP) was not overly hampered by the result, in spite of the fact that the 0.5% showing represented a significant dip from Q2’s counterpart print of 0.7%.

Drilling down into the figures, the Office of National Statistics (ONS), which publishes the official data, revealed that activity in Britain’s construction sector contracted by a worrisome 2.2% during the 13-week period – an outcome which may have prompted George Osborne, the Chancellor of the Exchequer, to announced a boost in funding for UK housebuilders in his Autumn Statement on Wednesday.

However, the drop-off in the construction sector was more than mitigated by a 0.7% expansion in the domestic services sector, which comprises around three quarters of Britain’s economy.

GBP to EUR Conversion Rate saw BEST of 1.4248 Today

The Pound managed to push forward against the euro (currency : EUR) on the day, sending the GBP EUR exchange rate Northwards to as high as 1.4248, largely thanks to the release of more disappointing data from the euroland’s premier economy.

The drop-off in the latest edition of the German GfK Consumer Sentiment Indicator from 9.4 last month to 9.3 this set alarm bells ringing for investors holding the euro; it was the sixth month on the trot that the key indicator had fallen.

The widely held belief amongst market participants is that, if Germany’s economy continues to perform, then the euro area economy at large will be able to weather any short term difficulties.

The news sent the euro US Dollar exchange rate down to a fresh near-term low of 1.0566 EUR USD.

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TAGS: Pound Dollar Forecasts Pound Euro Forecasts Pound Sterling Forecasts