Pound Sterling to Euro (GBP/EUR) Exchange Rate Could Brush 1.28 if Greek Situation Deteriorates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2738 on Wednesday amid static trading and a decided lack of economic reports.
On Tuesday the news that the UK’s current account deficit widened left the Pound under pressure, but the British asset swiftly recouped losses after it was announced that the Greek Presidential candidate supported by the nation’s Prime Minister failed to secure enough backing in the second ballot.
If support for the candidate is weak in the third and final vote (due to be held on the 29th) Greece would face a snap election, and – depending on the outcome – the nation’s place in the Eurozone could be called into question.
Many industry experts have intimated that a snap election would be won by leftist party Syriza. The party’s leader, Alexis Tsipras, has pledged that Syriza will renegotiate the country’s international bailouts.
After the second failed vote Tsipras stated; ‘Neither Parliament nor the Greek people will give Mr Samaras the mandate to continue the memorandums and the demands of austerity.’
Yesterday’s development also saw PM Antonis Samaras state; ‘Every deputy will come face to face with the interests of the country. Everyone will assume their responsibility, the responsibility for the consequences their vote will have on stability and the country’s future.’
Market movement will be severely limited today, but investors will already be looking ahead to next year and the potential implementation of full scale quantitative easing by the European Central Bank in early 2015.
If the current uncertainty in Greece effects the ECB’s decision to roll out QE, the GBP/EUR exchange rate could test the 1.28 level.
GBP/EUR Exchange Rate Pares Decline as Greek Election Looms
The Pound Sterling to Euro (GBP/EUR) exchange rate recouped the losses recorded following the release of poor UK current account and annual third quarter growth data as the European session progressed on Tuesday.
The Euro eased lower against several of its currency counterparts, with the EUR/GBP exchange rate hitting a low of 0.7836, after the second Greek Presidential vote saw Prime Minister Antonis Samaris’ candidate fail to secure enough backing again. If the third (and final) vote on the 29th also fails to be conclusive, the Euro could falter.
Meanwhile, the Pound Sterling to US Dollar (GBP/USD) exchange rate fell to a 15-month low over the course of the North American session as investors flocked to the US Dollar following the publication of unexpectedly strong third quarter growth figures for the US.
Earlier…
GBP/EUR Exchange Rate Trends Lower after UK Data
The Pound Sterling to Euro (GBP/EUR) exchange rate lost ground on Tuesday after the UK released final third quarter growth figures.
While the quarterly figure for the three months through September was left unrevised at 0.7%, the pace of annual expansion was adjusted from 3.0% to 2.6%.
Meanwhile, Total UK Business Investment fell by -1.4% in the third quarter, quarter-on-quarter, double the -0.7% drop anticipated.
The UK’s current account figure was also worse-than-anticipated.
There were some positives to be derived from this morning’s batch of ecostats however. UK household spending was shown to have increased by the most for over four years (0.9%) and UK exports climbed by 0.6% over the three months.
The Pound Sterling to Euro (GBP/EUR) exchange rate fell to a low of 1.2709 after the reports were published.
Earlier…
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in a narrow range on Tuesday ahead of the publication of the UK’s final third quarter growth data.
GBP/EUR Exchange Rate Little-Changed by French GDP
On Monday the Euro recovered some of its recent declines against the Pound as the price of crude oil recovered slightly and Russia’s economic outlook improved.
The Pound Sterling to Euro (GBP/EUR) exchange rate began Tuesday’s European session trending in the region of 1.2741 and spent the morning fluctuating around that level.
The pairing was unmoved by the release of final third quarter GDP figures for France.
Data confirmed that the French economy expanded by 0.3% in the third quarter on a quarter-on-quarter basis.
The Eurozone’s largest economy published annual growth of 0.4%.
According to the Insee statistics agency; ‘In Q3 2014, wages earned by households decelerated slightly (+0.2% after +0.4%); the average wage per capita paid by non-financial corporations (NFC) increased by 0.3%, as in Q2, but employement decreased (–0.1% after 0.0%). Social benefits accelerated (+1.0% after +0.4%), notably pensions. Taxes on income and wealth were almost steady (+0.1% after –0.3%). Finally, households’ gross disposable income (GDI) continued to rise: +0.5%, as in Q2.’
Meanwhile, Italy’s retail sales report showed stagnation month-on-month in October, rather than the 0.1% growth expected.
This followed a monthly sales decline of -0.1% in September.
Retail sales were down -0.8% on the year, a much steeper drop than the -0.5% forecast.
As Istat noted; ‘In October 2014 the seasonally adjusted retail trade index was unvaried with respect to September 2014 (0.0% for food goods and 0.0 for non food goods). The average of the last three months compared to the previous three months decreased by 0.3%.’
Pound Sterling to Euro Exchange Rate Forecast
In the hours ahead the Pound Sterling to Euro (GBP/EUR) exchange rate could fall in reaction to the UK’s final third quarter growth data.
The UK’s BBA Loans for House Purchase figures and Business Investment data could also prove influential.
Further GBP/EUR exchange rate movement will be limited in the run up to Christmas.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2741
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7847
