The Pound Sterling to Euro (GBP/EUR) exchange rate strengthened by around 0.22% on Tuesday morning.
With speculation that Greece will leave the Eurozone gaining momentum, the shared currency is trending lower versus the majority of its most traded currency competitors. A lack of domestic data will see traders focussing on geopolitical developments.
The Pound, meanwhile, is trending higher versus many of its major peers as traders await several data publications, including growth estimate data. An improvement in BRC Sales data is the reasoning behind the fractional Sterling advance.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3466.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a tight range on Monday afternoon.
With tensions mounting regarding the possibility of Greece exiting the Eurozone, the shared currency is generally trending lower versus most of its major peers. Positive domestic data has slowed the decline, but has been less impactful under the weight of geopolitical tension.
The Pound, meanwhile, is also trending lower versus the majority of its most traded currency rivals as the UK weighs the potential ramifications of a Grexit. Aiding the Sterling downtrend is fears that the Bank of England (BoE) will cut their inflation forecast for 2015 on Thursday.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3472.
Pound Sterling (GBP) Exchange Rate Edges Lower on Inflation Concerns
After inflation fell to a record-equalling low of 0.5%, UK economists feared that tanking oil prices could drive inflation into negative territory. Many experts predict that the BoE will cut their inflation forecast for 2015 in the quarterly inflation report due on Thursday morning.
Prime Minister David Cameron led a meeting of Treasury and BoE officials regarding the impact of Grexit on the financial market. The meeting ‘was an opportunity for him to get the latest from officials from the Treasury, the Department for Business, the Foreign and Commonwealth Office, as well as the financial regulator and the Bank of England,’ Cameron’s spokesman, Jean-Christophe Gray, told reporters in London. ‘People would expect the government to look at a range of contingencies’ given the ‘interdependencies’ in the global financial system’, Gray said.
Cameron has intimated that he would do all in his power to limit the impact on Britain, but many question his ability to live up to his words.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3405 today.
Euro (EUR) Exchange Rate Softens on Grexit Fears
With Greece’s Prime Minister Alexis Tsipras showing no sign of bowing down to the demands of international creditors and refusing to accept their current funding plan, tension is bubbling with regards to the potential of a Greek exit from the Euro.
‘The stress has been ratcheted up again because the Greek PM does not appear to have moderated his stance at all,’ said Peter Chatwell, a London-based rates strategist. ‘The market has learned over the past few years that things have a tendency to get worse before they get better with regards to any political negotiations in Europe.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Steady
With a complete lack of domestic data to drive changes, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to continue trending within a narrow range for the remainder of Monday. There will, however, be several British data publications on Tuesday with the potential to provoke volatility. An absence of European data is likely to cause traders to focus on geopolitical developments.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.3487 today.
