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Pound Sterling to Euro (GBP/EUR) Trading at 1.36 on US Dollar (USD) Weakness, Despite Moody’s Grexit Warning – Greece Transfers Pensioner’s Funds

Pound Sterling Currency Forecast

The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.36 on Friday after the Euro rallied significantly on Thursday on account of US Dollar (USD) weakness.

However, the situation in Greece could cause Euro movement in coming weeks as the nation attempts to transfer pensioner’s funds to the state to buy more time with negotiators.

Earlier… The Pound Sterling to Euro (GBP/EUR) exchange rate slipped in Thursday’s European trading, falling below the 1.37 boundary after residing above 1.40 frequently in the past few weeks.

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

The Euro (EUR) exchange rate was buoyed by relatively upbeat Eurozone data, beginning with German Retail Sales numbers. Although March recorded a -2.3% monthly contraction, the annual ecostat climbed from a negatively revised 3.3% to 3.5%.

Additionally, the German Unemployment Rate figure remained steady at 6.4% in April, although Unemployment Change failed to reach the -15K forecast, instead coming in at only -8K.

ING economist Carsten Brzeski commented: ‘Despite some unsolved structural issues (think of female labour market participation, demographic change or the low-wage sector) and still some room for improvement, the extremely solid labour market remains the showcase model of the German recovery.’

Meanwhile, investors were gearing up for the highly influential Eurozone Consumer Price Index (CPI) release on Thursday, and inflation managed to climb from contraction territory at -0.1% to 0.0%. However, the Eurozone Unemployment Rate remained unrevised at 11.3% in March rather than declining to 11.2% as forecast.

Economist Christian Schulz stated: ‘After four months with negative inflation rates, the Eurozone officially exited deflation in April. However, this is not yet a sign of fading domestic disinflationary pressures, as the painfully slow decline in unemployment evidenced in today’s unemployment data for March reminds us.’

Meanwhile, the Pound (GBP) was offered a little support much earlier in the session after the UK’s GfK Consumer Confidence Survey remained at 4 in April, in line with forecasts and a 12-year high. The ecostat was a favourable figure ahead of the UK’s general election in May, an event that’s expected to cause Pound Sterling (GBP) exchange rate vulnerability.

GfK managing director Nick Moon stated: ‘The government goes into the election with the final Consumer Confidence Barometer offering mixed fortunes. On the one hand, there is no continuing momentum—the index has not risen since last month—while on the other hand the index is standing at a far higher point than when the government came to power.’

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

Friday’s forecast to be an interesting day for the Pound Sterling to Euro (GBP/EUR) exchange rate with the release of the influential Markit Manufacturing Purchasing Managers Index (PMI), Net Consumer Credit and Mortgage Approvals stats.

It’s been a relatively quiet week for British data this week, leaving the Pound fairly open to movement from developments in other nations.

Meanwhile, with no more data from the Eurozone out in the rest of the week, the Euro (EUR) exchange rate could experience swings on any developments between Greece and its creditors.

The nation has somewhat unsuccessfully attempted to renegotiate its austerity deal this year and investors are hoping the government’s new team of negotiators could help to encourage progress.
Furthermore, Moody’s suggested that the possibility of a Grexit is rising.

Moody’s stated: ‘Moody’s expects Greece to reach an agreement with its creditors and avoid default. However, lack of progress so far means the probability of a default, and of exit, is rising.’

The Euro to Pound Sterling (EUR/GBP) exchange rate is trading at 0.7256; the Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3785.