Published: 21 Jul at 12 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, USA, Greece,
Pound Sterling (GBP)
The British Pound edged lower versus many of its currency rivals on Tuesday despite mixed results from domestic finances data which erred towards positivity. The Poundâ€™s depreciation is the result of traders locking in profits after last weekâ€™s significant surge has opened up some attractive selling positions. Whilst British economic data produced a mixed-bag of results on Tuesday, government borrowing declined when compared with the same period last year. This is likely to please Chancellor George Osborne faced with the mammoth task of eliminating the UKâ€™s budget deficit. However, the drop in government borrowing was not quite as prominent as the median market forecast suggested.
With tensions in Europe easing after Greece
paid debt arrears to the International Monetary Fund (IMF), and settled a debt owed to the European Central Bank (ECB) on time, the shared currency advanced versus many of its currency competitors. However, many analysts forecast the appreciation to be short lived as traders redirect focus from geopolitical developments to monetary policy. Given that the ECB stated that quantitative easing is very likely to continue through to its scheduled conclusion, the common currency is predicted to return to bearish trade for the foreseeable future. In addition, some analysts are predicting that the situation in Greece is far from resolution given that the new deal to unlock aid is flawed. With the Hellenic nations ability to sustain its debt load being called into question, many economists fear that the latest deal is just delaying the inevitable return to Greek negotiations.
US Dollar (USD)
Despite a lack of influential domestic data to provoke volatility, the US asset strengthened versus many of its currency rivals during Tuesdayâ€™s European session. The appreciation is the result of heightened speculation regarding the timing of a Federal Reserve benchmark interest rate hike. Given that the Federal Open Market Committee (FOMC) suggested that the situation in Greece was a hindrance to policy tightening, easing concerns has stoked expectations of a fourth-quarter cash rate increase. US Industrial Production & Capacity Utilisation data, due for publication later on Tuesday afternoon, is unlikely to have a significant impact on US Dollar movement.
As of Tuesday, 21st July 2015, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.4225, GBP USD exchange rate was 1.5558,