Euro Draws Level as Germany Sees -13k Fall in Unemployment
The Euro started the London session trending down against Pound Sterling, but has since recovered thanks to key German employment data, which shows unemployment unexpectedly fell from 6.4% to 6.3%. Unemployment change was nearly three times what was forecast with a drop of -13k.
Earlier…
Investors Focus on United Nations Conference on Climate Change Ahead of ECB Rate Decision
The week-long COP21 conference on climate change being held in Paris will keep investors occupied between key data releases, as the EU nations meet to discuss policies which could result in billions of Pounds worth of initiatives and investments to battle climate change. The UK might find its influence at the talks weakened after George Osborne scrapped £1 billion of ring-fenced funds to help with the development of Carbon Capture and Storage projects.
Earlier…
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently experiencing volatility as George Osborne’s Autumn Statement continues to dampen appetite for the UK tender. Meanwhile the Euro is experiencing mixed fortunes, relying on weakness from other currencies in order to advance.
GBP/EUR Exchange Rate Forecast: Pound Sterling Declines Despite Improved Housing Market
Recently released UK data shows a minor uptick in the housing market, with the number of mortgage approvals in November increasing to 69,630, an improvement upon the previous month’s figures, but slightly worse than the 69,900 forecast by economists. The number fits with the average over the past six months according to the Bank of England (BoE). Net Lending also increased, with its best rise since 2008 of £3.63 billion. Figures also showed that year-on-year (YoY) lending to companies has risen for the first time since 2012.
While the data suggests an improvement in housing demand and business finances, investors continue to focus on George Osborne’s Autumn Statement. Although measures announced in the Autumn Statement appeared to be less severe than first feared, a further analysis of Osborne’s policies has seen many economists issue warnings over the perceived lack of flexibility he last left himself to meet his targets. The Chancellor is aiming for a £10 billion surplus during the 2019/20 financial period.
The GBP/EUR exchange rate is currently trading in the region of 1.4195.
EUR/GBP Exchange Rate Forecast: Volatile Trading as Future of Schengen Uncertain
The Syrian refugee crisis and the renewed threat of terrorism have cast doubts over the future of the EU’s Schengen Agreement. The agreement, signed in 1985, saw 22 EU countries remove their border controls and allow passport-free movement between them. At the moment, only six EU countries are not part of the agreement. Non-EU nationals can travel with a Schengen visa and are unlikely to be subject to identity checks once inside the EU border.
However, the recent crises have seen countries including Germany reinstating their border controls following the events in Paris over fears that further Jihadists could be planning to exploit the ease of movement to carry out further attacks. A new agreement has been negotiated which will see the EU provide funds to Turkey in order to help the Turkish government stem the tide of refugees who make the crossing to Greece. Yet German chancellor Angela Merkel has hosted a surprise mini-summit of willing nations to discuss accommodating further refugees.
President of the European council, Donald Tusk, has argued against the mainly-western view that Turkey can protect EU borders, warning: ‘Let us not be naive. Turkey is not the only key to solving the migration crisis. The most important one is our responsibility and duty to protect our external borders. We cannot outsource this obligation to any third country. I will repeat this again: without control on our external borders, Schengen will become history.’
The EUR/GBP exchange rate is currently trending between 0.7029 and 0.7050.
GBP/EUR Exchange Rate Forecast: Focus on German Consumer Price Index Later Today
The Euro’s current downtrend may be partly attributed to investors pausing before the German Consumer Price Index is released later on today. The CPI is expected to rise to 0.4% and this result could see the Euro strengthening against Pound Sterling, which can offer little resistance.
The GBP/EUR exchange rate is currently trending between 1.4170 and 1.4219.
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