- UK currency Gains Despite Lack of Data – Widespread uptrend for Sterling
- IFS predictions favour ‘In’ vote – Warning of extended austerity after ‘Brexit’
- Euro unstable on Greek debt news – More bailout funds granted but debt relief remains elusive
- UK GDP Published – Sub-par annual result has negative impact on GBP
- UPDATE: UK Consumer Confidence Better-than-expected
GBP/EUR Edges Higher after GfK Consumer Confidence Report
After dipping from its recent three and a half month high, the Pound Sterling to Euro exchange rate recorded a modest gain on Friday thanks to a slightly better-than-forecast UK consumer confidence report from GfK.
It had been expected that the sentiment gauge would worsen from -3 to -4 but it actually printed at -1.
Subsequently the GBP/EUR currency pair climbed 0.2% to trade in the region of 1.3122.
However, as trading continued the Pound softened, with the British currency easing back to below the 1.31 level.
(Previously updated 17:00 27/05/2016)
Pound Slips As UK Growth Slows
The Pound declined against peers like the Euro, US Dollar, Australian Dollar and New Zealand Dollar on Thursday as UK growth was shown to have slowed substantially in the first quarter of 2016.
While the rate of quarterly expansion printed at 0.4%, as anticipated, the year-on-year figure of 2.0% was less than the 2.1% result analysts had hoped for.
PwC economist John Hawksworth was quoted by The Guardian as saying this of the result;
‘Global concerns have eased more recently, but uncertainty related to the EU referendum could lead to a further moderation in growth in the second quarter as some businesses continue to defer investment and hiring decisions. But the economy should rebound in the second half of the year in the event of a vote to Remain.’
The Pound Sterling to Euro (GBP/EUR) exchange rate lost 0.5% to trend in the region of 1.3100.
Further declines could occur tomorrow if the UK’s Consumer Confidence report shows the decline in sentiment forecast by economists.
(Previously updated 08:30 26/05/2016)
With the UK’s latest growth data looming, the Pound moved away from recent highs against the Euro.
The current forecasts are for quarter-on-quarter expansion of 0.4% and year-on-year growth of 2.1%, but if the results deviate from this the Pound could slide as trading continues.
The GBP/EUR exchange rate is currently trending in the region of 1.3178
(Previously updated 17:00 25/05/2016)
GBP/EUR Hits 1.32 Ahead of UK GDP Data
The Pound to Euro (GBP/EUR) rally continued on Wednesday, with the pairing soaring to 1.3218.
Although Sterling struggled to hold the 1.32 level, the fact the currency managed to strengthen so far is significant.
While Thursday’s UK GDP data could weigh on demand for the British currency if it shows that the rate of UK growth slowed in the first quarter, as is expected to be the case, as long as the report doesn’t deviate from forecasts the Pound’s resilience against the Euro may continue.
(Previously updated 13:35 25/05/2016)
After beginning the day trending in a fairly tight range, the Pound Sterling to Euro (GBP/EUR) exchange rate advanced by 0.4% on the day’s opening levels, approaching 1.32 before the close of the European session.
UK Economic News: GBP makes Slow Advance as IFS Warning comes Alongside Balanced ‘Brexit’ Poll
With little UK domestic data coming out this week, the Pound is instead being influenced by information and forecasts concerning the EU Referendum, with the voting day in less than a month’s time.
Most recently, a dovish warning over the outcome of a ‘Brexit’ has clashed with the latest polling data for voter opinions leading up to the Referendum.
In the former case, the supposedly neutral Institute for Fiscal Studies (IFS) has warned that in the event of a ‘Brexit’, the UK could be in store for around two more years of austerity measures. This conclusion was reached due to predictions that the UK economy would shrink, which would in turn force ministers to implement further budget cuts or extend existing ones for greater periods of time.
Elsewhere, the latest YouGov poll has put the ‘Remain’ vote at a level 41% with the chances of a ‘Leave’ vote, with the apparent drop for ‘In’ confidence coming from falling trust in Prime Minister David Cameron.
The Pound has made minor gains against the Euro (GBP/EUR) but fallen by -0.5% against the Russian Ruble (GBP/RUB).
Euro Movement Uncertain as Eurogroup Meeting brings Progress for Greece
The latest non-data related news to come out of the Eurozone has concerned the fate of debt-ridden Greece, which has been granted a lifeline in the form of a €10.3bn loan from creditors.
The loan comes with caveats, however, as while agreements have been made for potential debt relief in the future, these measures are unlikely to be put in place as early as one of Greece’s biggest lenders, the International Monetary Fund (IMF), would like.
In terms of economic announcements, the latest Gfk and IFO surveys for Germany’s current and future prospects have come out positively across the board, although the small size of the gains recorded may have had a low impact on the overall appeal of the Euro.
Future GBP, EUR Forecast: ECB’s Constancio to Speak in Future along with ECB’s Praet
The only notable events due today are expected to come from the Eurozone, in the form of speeches before noon from European Central Bank (ECB) officials Vitor Constancio and Peter Praet.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3145 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7608 today.