Pound Sterling to Euro (GBP/EUR) Exchange Rate
Although figures compiled by the Office for National Statistics showed that the UK recorded its strongest pace of annual growth since 2007 in 2014, the Pound edged lower against the Euro after growth slowed by more-than-anticipated on a quarterly basis.
The UK economy expanded by 0.5% on a quarter-on-quarter basis in the fourth quarter rather than registering the expansion of 0.6% expected.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3373
Earlier…
GBP/EUR Exchange Rate Could Soften on Slowing Growth
Although the Pound Sterling to Euro (GBP/EUR) received some support on Monday as a Bank of England (BoE) official hinted at sooner-than-forecast interest rate hikes, the pairing went on to shed around 0.4% ahead of the publication of the UK’s GDP report.
If the growth data should surprise to the upside, the GBP/EUR pairing could climb back above 1.34.
However, given the recent slides in Services, Manufacturing and Construction PMI, it’s more likely that the GDP figure will disappoint.
In that instance, the Pound Sterling to Euro (GBP/EUR) exchange rate would fall.
The GBP/EUR pairing is currently trading in the region of 1.3332
Earlier…
GBP/EUR Exchange Rate Stabilises on Rate Hike Comments
Before the close of the European session, the Pound Sterling to Euro (GBP/EUR) exchange rate recovered losses to trade around the day’s opening levels in response to comments issued by a Bank of England policymaker.
Kirstin Forbes indicated that the market might have pushed back interest rate hike expectations too far and the Pound climbed as a result.
As well as stabilising against the Euro, the Pound gained on the US Dollar for the first time in four days.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3360.
Earlier…
GBP/EUR Exchange Rate Pares Initial Election Gain
In the immediate aftermath of the Greek election results, the Pound Sterling to Euro (GBP/EUR) exchange rate climbed above 1.34.
However, as Syriza failed to secure enough parliamentary seats to govern without a coalition partner, the GBP/EUR pairing shed some of its initial gains and returned to trending in the region of 1.3362.
In the view of currency strategist Jeremy Stretch; ‘We saw the Euro selling off initially, but now we’ve had a bit of a bounce. We’ve moved such a long distance over a short period of time that maybe some people think it’s time to lighten positions. We had a fairly strong assumption of who was going to win the election so the next part is the key issue.’
Similarly, currency strategist Niels Christensen observed; ‘It’s too early for concerns. Few people fear that this could be the start of another European debt crisis. I think there is some profit taking’.
Today’s German business confidence and conditions reports showed improvement and inspired some GBP/EUR losses.
Earlier…
GBP/EUR Exchange Rate Higher as ‘Grexit’ Fears Grow
The news of Syriza’s election victory in Greece could well push the Pound Sterling to Euro (GBP/EUR) exchange rate higher in the hours ahead.
Although it is not yet known whether Syriza has secured an outright majority, the party has certainly obtained enough backing to the be the dominant party in a coalition, obtaining around 35% of the vote.
A Syriza spokesman said of the decision; ‘What’s clear is we have a historic victory that sends a message that does not only concern the Greek people, but all European peoples.’
In the immediate aftermath of the election results being announced the Pound Sterling to Euro (GBP/EUR) exchange rate surged above 1.34.
Whether the pairing can maintain its currently elevated levels remains to be seen, but Euro sentiment is unlikely to improve notably in the near future.
Earlier…
The Pound Sterling to Euro (GBP/EUR) exchange rate jumped to a seven-year high in the wake of the European Central Bank’s (ECB) QE announcement.
GBP/EUR Exchange Rate Rallies before Greek Election
At the beginning of the week, the Pound was still enjoying the updraft created by the Swiss National Bank’s (SNB) shocking policy adjustment and was trading in a stronger position against the Euro.
Over the next few days the pairing fluctuated in response to dovish minutes from the Bank of England’s (BoE) January policy meeting and mixed economic reports from the UK and Eurozone.
However, it was the ECB’s highly anticipated policy decision which caused the biggest shift in the GBP/EUR pairing.
To the surprise of both pessimistic and optimistic analysts, the quantitative easing scheme outlined by the central bank amounted to over 1 trillion Euros. As a programme of 500 billion Euros had been priced in, the common currency plummeted across the board in response to the decision and the Pound to Euro exchange rate advanced to a seven-year high.
This was the GBP/EUR currency pair’s third weekly advance.
As stated by currency strategist Peter Kinsella; ‘We’ve broken through some pretty important resistance and supports in Euro-Sterling. It seems that with the ECB’s actions, where they have more than delivered on their commitment to increase their balance sheet, it’s probably the case that this down move in Euro-Sterling will continue. You just don’t have any reason to buy the Euro now from an investment point of view.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
Given that the outcome of Sunday’s Greek election could affect the nation’s place in the Eurozone, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to experience volatility after the votes come in.
According to The Guardian; ‘If Syriza wins Sunday’s vote, the political impact will not be confined to Greece. There would be a ripple effect across other parts of the continent, where anti-austerity and anti-establishment parties are also growing. The leader of Spain’s leftwing Podemos movement, Pablo Iglesias, joined Mr Tsipras in a rally this week in Athens, calling for “a wind of change in Europe”. The strength of that wind is hard to predict, not just in Greece, but it cannot and should not be ignored.’
The UK’s growth figures and the Eurozone’s employment/inflation stats will also have an impact on the GBP/EUR exchange rate in the days ahead.
The Reserve Bank of New Zealand’s (RBNZ) interest rate decision will also be interesting given that some economists have bet that the central bank will have to mimic its Canadian cousin and cut interest rates to combat low inflation.
At the weekend the Pound to Euro (GBP/EUR) exchange rate was trending in the region of 1.3371
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7477
