The Pound Sterling to Euro (GBP/EUR) exchange rate edged higher on Friday morning despite a disappointing British Consumer Confidence print. This is likely to be as a result of the hangover from the Swiss National Bank’s negative rate cut. A better-than-expected German Consumer Confidence print, meanwhile, has prevented significant Euro declination.
The Pound Sterling to Euro exchange rate is currently trending in the region of 1.2759.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate rallied by around 0.78% on Thursday afternoon. This can be attributed to better-than-anticipated UK retail sales bolstering demand for the British asset. The shared currency, meanwhile, slumped against the majority of its most traded currency rivals after the Swiss National Bank introduced negative interest rates.
The Pound Sterling to Euro exchange rate is currently trending in the region of 1.2718.
SNB Rate Cut Causes Euro (EUR) Exchange Rate to Dive
The SNB introduced a negative interest rate in order to maintain the currency’s cap. This caused the single currency to decline against nearly all of its major peers. The Swiss currency was ‘experiencing renewed upward pressure vis-a-vis the Euro in the last few days,’ stated Swiss National Bank President Thomas Jordan. ‘Rapidly mounting uncertainty on the financial markets has substantially increased demand for safe investments. The worsening of the crisis in Russia was a major contributory factor in this development.’
Pound Sterling (GBP) Exchange Rate Rallies on Retail Sales
Thursday’s British economic data printed positively, allowing the Pound to strengthen versus many of its major peers. Year-on-year Retail Sales data was forecast to decline from 4.9% to 4.5% in November, but the actual result revealed an impressive surge to 6.9%. In addition, monthly Retail Sales increased from 1.0% to 1.7% in November, eclipsing the median market forecast of a drop to 0.3%.
‘These numbers verify the shift in spending patterns happening in the final quarter of the year. Black Friday led to unprecedented demand,’ said Natalie Berg from Planet Retail.
The Pound Sterling to Euro exchange rate has dropped to a low today of 1.2618.
Euro (EUR) Exchange Rate Softens on German Data
After German data produced mixed results on Thursday, the common currency softened against many of its most traded currency rivals. German IFO Business Climate increased from 104.7 to 105.5 and IFO Expectations advanced from 99.8 to 101.1. However, IFO Current Assessment remained unchanged at 11.0 despite predictions of a fractional uptick.
There is the possibility of a shared currency recovery, however, after Eurozone Construction Output improved in October.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Strengthen
Although Thursday’s Eurozone data has the potential to initiate a rebound for the single currency, the Pound is more likely to continue trending higher after consecutive positive data publications.
The Pound Sterling to Euro exchange rate has reached a high today of 1.2707.
