Pound Sterling to Euro (GBP/EUR) Conversion Rate Predicted to Edge Higher as Traders Take Advantage of Cheap GBP
The Pound Sterling to Euro (GBP/EUR) exchange rate edged higher by around 0.3% on Thursday afternoon.
The well documented slide of the Pound’s value is by no means over according to the majority of analysts, but today has allowed the Pound a little respite versus most of its major peers.
This was mainly due to traders taking advantage of the Pound’s competitively low trade weighting after the large drop in value opened up some attractive buying opportunities.
Also supportive of fractional Sterling appreciation today was fourth-quarter Gross Domestic Product which met with the median market forecast 1.9% growth on the year.
‘The fact that quarterly UK GDP growth in Q4 was left unrevised at 0.5 per cent was expected, but nonetheless comes as a bit of a relief given the jitters about the global recovery at the moment,’ stated Capital Economics chief UK economist Vicky Redwood.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.2683.
Euro to Pound Sterling (EUR/GBP) Conversion Rate Predicted to Tick Lower on ECB Stimulus Bets
Meanwhile the Euro softened versus many of its peers on Thursday afternoon in response to less-than-ideal domestic inflation data.
Eurozone Consumer Prices for January came in at 0.3% on the year, below the median market forecast 0.4%.
While the revision wasn’t major, persistent weakness ‘probably hurts long-term inflation expectations,’ said Jean-Francois Perrin, an inflation strategist at Credit Agricole SA’s corporate and investment bank unit in Paris. ‘It means clearly the ECB is not fulfilling its mandate in regard to inflation right now.’
The lower-than-anticipated Eurozone inflation has caused many to increase bets regarding aggressive stimulus measures from the European Central Bank (ECB) when policymakers meet in March.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.2604 today.
GBP/EUR Exchange Rate Forecast: German Inflation Data in Focus
Given the high likelihood of the Pound resuming depreciation amid mounting anxiety that the UK will vote to leave the European Union, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to erase today’s moderate gains.
Friday’s economic calendar has a number of ecostats with the potential to provoke GBP/EUR exchange rate volatility. British Consumer Confidence data may be impactful, but German inflation data is far more likely to cause changes.
The Pound Sterling to Euro (GBP/EUR) exchange rate reached a high of 1.2690 during Thursday’s European session.
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