British Pound to Euro, Dollar Exchange Rate Forecasts: China's GDP, UK CPI and US CPI to Watch This Week

April 11, 2016 - Written by Tim Boyer

STORY LINK British Pound to Euro, Dollar Exchange Rate Forecasts: China's GDP, UK CPI and US CPI to Watch This Week

The latest development to affect the stability of the Euro has been the signing of an anti-austerity pact between Greece and Portugal, something that may mean that the efforts of the International Monetary Fund (IMF) to have Greece meet bailout conditions are extremely hampered.

How will the Pound Sterling (GBP) exchange rates hold up following the release of UK inflation data? We examine the outlook for the pound sterling vs the euro and the US dollar

This week’s foreign exchange rate session is peppered with key risk events from the world’s leading economies.

Our leading analyst takes a look at the projected highlights below:

The number one data release this week, without a doubt, comes from the world’s second largest economy.

The early hours of Friday morning bring the publication of the hotly anticipated Q1 Gross Domestic Product data from China; an annualised showing of 6.7% is anticipated and such a print would be highly significant, pointing to a further slowdown in China’s economic growth from Q4 2015’s result of 6.8%.

Chinese Growth Data Predicted to Impact Pound Sterling (GBP), Australian Dollar (AUD) and NZ Dollar (NZD) Exchange Rates

When the Chinese Q4 growth number was published at the very start of this calendar year, investors took fright and shifted en masse out of risk-laden assets.

Global share markets suffered their worst start to a year in living memory as a consequence and the safe haven Japanese Yen (currency:JPY) and the Swiss Franc (currency:CHF) enjoyed strong support.

If Friday sees a repeat performance, then expect the risk-driven Australian Dollar (currency : AUD) and New Zealand Dollar (currency : NZD) to suffer pronounced downside ahead of the weekend close.

UK CPI Could Send Pound to Dollar Exchange Rate Higher, Climbing Inflation Supports GBP Neutral-Negative Outlook

Elsewhere, Consumer Price Index inflation data releases on either side of the Atlantic is also expected to prove market-moving.

Tomorrow’s UK CPI figures for March are by no means guaranteed to show that domestic price rises have accelerated from the February year-on-year showing of 0.3%.

Meanwhile, Thursday afternoon’s US inflation statistics are expected to print at a higher level than last time out; the consensus estimate amongst analysts is for an annualised showing of 1.1% - an outcome which would pave the way for another interest rate hike from the US Federal Reserve before the end of Summer.

If such a result transpires, then look for the Pound Sterling US Dollar exchange rate to settle back below the psychologically significant 1.4000 GBP/USD threshold.

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TAGS: Forecasts