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Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Soften ahead of British Data

Euro Currency Forecast

The Euro to Pound Sterling (EUR/GBP) exchange rate softened by around -0.15% on Friday morning.

As traders await British data, due for publication later on Friday morning, the Pound is generally holding steady against its major peers. The Euro, meanwhile, is generally trending lower thanks to a disappointing result from German retail sales.

The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7803.

Previously…

The Euro to Pound Sterling (EUR/GBP) exchange rate is trending within a tight range on Wednesday afternoon. 

This is due to a mixed-bag of European data compounding anxieties regarding the necessity for the European Central Bank (ECB) to stimulate economic recovery with aggressive bond-buying measures.

The Pound, meanwhile, edged higher versus many of its major peers after a fractional improvement in British shop prices. Other positive British economic data supported slight Sterling gains.

The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7842.

Euro (EUR) Exchange Rate Declines on Mixed Data

A slight Euro appreciation, following better-than-expected German labour market data, was soon eradicated after Eurozone Retail Sales and Italian Unemployment disappointed. In addition, the Eurozone Consumer Price Index declined beyond the median market forecast of a drop from 0.3% to -0.1%, with the actual result being -0.2%.

‘According to the ECB’s own logic, with sub-zero inflation, no sign of a material pickup on the horizon, and inflation expectations de-anchoring, there is a compelling case for further monetary easing,’ said Teunis Brosens, economist at ING. ‘The question no longer seems ‘if’ the ECB is going to announce QE, but ‘how’ it will be tailored.’

The Euro to Pound Sterling (EUR/GBP) exchange rate has dropped to a low today of 0.7829.

Pound Sterling (GBP) Exchange Rate Edges Higher on Domestic Data

Although British shop prices registered a twentieth-consecutive month of deflation, a fractional improvement in December allowed the Pound to edge higher versus many of its most traded currency rivals. The BRC Shop Price Index increased above expectations of an uptick from -1.9% to -1.8%, with the actual result reaching -1.7%.

In addition, UK New Car Registrations increased from 8.0% to 8.7%, and the Lloyds Business Barometer rose from 42 to 45. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), stated that sales in 2014 had been ‘incredibly strong, stronger than expected’ as the British economic recovery saw renewed confidence among consumers.

Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Trend Lower

With the recent set of ecostats amplifying trader anxieties that the ECB will have to stimulate the Eurozone’s economic recovery, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to continue trending lower on Wednesday.

The Euro to Pound Sterling (EUR/GBP) exchange rate climbed to a high today of 0.7854.