Pound Sterling to Euro (GBP/EUR) Exchange Rate Set to Hold Firm as the Year Draws to a Close
Concerns regarding the current political uncertainty in Greece are weighing on the Euro and are likely to continue to do so until the third (and final) round of balloting is held on January 29th.
Some industry experts have expressed fears that the upheaval could prevent the European Central Bank (ECB) from rolling out quantitative easing measures early next year.
In the opinion of industry expert Manish Singh; ‘The issue now is one of the impact on ECB policy given how close we have come to a sovereign QE. A delay in sovereign QE due to Greece will nip the European equities rally in its bud.’
Similarly, investment manager Gilles Guilbout observed; ‘The main fear now is that we are back where we were two years ago with the threat of politics back in the picture. Greece is not a big, big deal, but it’s really a catalyst, or the tip of the iceberg.’
While Pound Sterling to Euro (GBP/EUR) exchange rate movement will be limited today, the common currency could fall on the 29th if Prime Minister Antonis Samaras again fails to get enough backing for his Presidential candidate.
Earlier…
GBP/EUR Exchange Rate Trends at 1.2732
With the day’s only Eurozone ecostat, final French growth data, printing in line with previous estimates, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in a narrow range on Tuesday.
The GBP/EUR exchange rate went on to soften by around 0.25% after the UK’s current account deficit widened unexpectedly and the UK’s annual third quarter growth figure was negatively revised.
However, before the close of the European session the Pound recouped losses. The Euro edged lower against several of its currency counterparts as the Greek Presidential nominee backed by Prime Minister Antonis Samaras failed to secure enough backing for a second time.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending around the day’s opening level of 1.2739.
Earlier…
GBP/EUR Exchange Rate Weakens as Russian Fears Decline, Confidence Improves
The Pound Sterling to Euro (GBP/EUR) exchange rate consolidated losses as the European session progressed on Monday amid encouraging comments regarding oil prices and an easing in worries relating to the weakness in Russia’s economy.
The Pound was holding steady against the US Dollar.
According to forex strategist Lee Hardman; ‘The Pound’s move against the Euro is more about the Euro. Oil prices rebounded alongside the Ruble. It seems concern about Russia’s economic outlook has eased and that supported the Euro. We expect the Pound to strengthen against the Euro longer term’.
The GBP/EUR exchange rate was also trending in a weaker position as a result of an unexpectedly strong increase in the Eurozone’s Consumer Confidence Index. The sentiment measure rallied from -11.5 to 10.9 in December, beating expectations for a reading of 11.0.
The improvement in confidence was largely attributed to falling oil prices.
Over the course of European trading the Pound Sterling to Euro (GBP/EUR) exchange rate fell by 0.3% to brush a low of 1.2719.
Earlier…
The Pound Sterling to Euro (GBP/EUR) exchange rate began the week trending in the region of 1.2733 having softened by -0.3% on the day’s opening levels.
GBP/EUR Exchange Rate Unflustered by German Import Price Index
Although Sterling was bolstered last week by the UK’s better-than-forecast retail sales figures and encouraging average earnings data, the prospect of the European Central Bank (ECB) deploying additional stimulus measures to support domestic growth gave the Euro a boost on Monday.
While the increasing odds of additional stimulus being utilised would traditionally undermine demand for the common currency, the hope that the action will help put the Eurozone’s recovery back on track helped the Euro advance.
The Pound Sterling to Euro (GBP/EUR) exchange rate was little-affected by the German Import Price Index.
Import prices are expected to have fallen by -0.7% on the month in November following a -0.3% decline in October. Prices actually dropped by -0.8% on the month and were down -2.1% on the year.
An annual slide of -1.9% had been anticipated.
According to Digital Look; ‘The pace of falls in German import prices accelerated in November as a result of the decline in the price of oil purchased abroad. […] Excluding crude oil and mineral oil products import prices rose by 0.1% versus a year earlier.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
In the hours ahead the Pound Sterling to Euro (GBP/EUR) exchange rate could experience movement as a result of the Eurozone’s Consumer Confidence Index for December.
Economists have forecast that sentiment improved from -11.6 in November to -11.0 in December.
If that proves to be the case, the GBP/EUR exchange rate could extend this morning’s declines before the close of the local session.
Investors with an interest in the Pound Sterling to Euro (GBP/EUR) exchange rate will also be focusing on tomorrow’s French third quarter growth data.
The final figure is expected to confirm initial estimates of 0.3% quarter-on-quarter growth and year-on-year expansion of 0.4%.
A disappointing result could adversely influence the Euro.
Also due for release on Tuesday is the UK’s BBA Loans for House Purchase figure, the final UK third quarter growth number and third quarter current account data.
Economists believe that the UK’s growth report will show third quarter expansion of 0.7%.
Of course, with Christmas fast approaching market movement is likely to be limited. The Pound Sterling to Euro (GBP/EUR) exchange rate could therefore spend much of the week trending in a narrow range.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.2733
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7851
