The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.44% on Wednesday morning.
With British economic data set to improve on Wednesday morning, the Pound strengthened versus many of its most traded currency rivals. With many traders speculating that the Bank of England (BoE) will hike rated sooner-than-expected, the Pound enjoyed a steady rise over the past few days.
The shared currency, meanwhile, continued to trend lower versus most of its major rivals. With Greece on the brink of losing financial aid from unhappy creditors, they have now resorted to dipping into the rescue fund.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4140.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate strengthened by around 0.59% on Tuesday afternoon.
British sales data failed to advance in line with the market consensus, but the data had a minimal impact on Sterling movement. This is because the recent launch of quantitative easing in the Eurozone has the potential to be beneficial for the UK.
The Euro, meanwhile, softened versus the majority of its most traded currency competitors. This is due to heightened potential for Greece to become independent of the Eurozone after creditors found fault with Greece’s debt repayment. Anxieties are rife that if the Greeks continue to refuse to let Eurogroup representatives into Athens they will stand to lose all financial aid.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4021.
Pound Sterling (GBP) Exchange Rate Strengthens on Eurozone QE
As mentioned above, quantitative easing in the Eurozone is seen as positive for the British economy. This is due to the fact that Britain is the Eurozone’s largest trading partner, and a softer shared currency will see cheaper imports.
British data printed disappointingly on Tuesday, but the results had minimal impact on the Pound. BRC Like-For-Like Sales gained by 0.2% in February on the year, below the median market forecast of 0.5% growth.
‘So far, 2015 has been positive for both retailers and consumers and it shows no signs yet of changing course,’ said BRC director general Helen Dickinson.
The Pound Sterling to Euro (GBP/EUR) exchange rate has fallen to a low of 1.3929.
Euro (EUR) Exchange Rate Tumbles as Greece and Eurogroup Clash
Although many analysts thought that the potential for a Greek exit from the Eurozone abated after the Eurogroup agreed a bailout extension, anxieties were renewed following a rejection of the proposals laid out by Athens for their debt repayment program.
The shared currency softened in response to this, with the downtrend aided by comments from European Central Bank (ECB) President Mario Draghi. Draghi urged Athens to allow Eurogroup representatives back in Athens or Greece could face losing all of its financial aid. However, Greece seems to be standing firm behind its ant-austerity government, who are showing increased reluctance to cooperate.
‘If Europe leaves us in crisis, we will flood it with migrants,’ said Panos Kammenos, the defence minister and leader of the Independent Greeks party.
‘Too bad for Berlin if there are some Jihadis from Islamic State in that wave of millions. If they strike us, we will strike them,’ said Manolis Glezos a Syriza MEP.
‘Relations have reached a new low. It’s turning into an arms race,’ said Mats Persson from Open Europe. ‘These comments are a recipe for matters to get out of hand, and it is becoming increasingly hard for Germany to back down.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Gains
Given the lack of data to curb the trend, and with the situation in Europe heating up rapidly, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to hold gains for the remainder of Tuesday’s trade.
Wednesday could see heightened GBP/EUR volatility with ECB President Mario Draghi due to give a speech in Frankfurt. Also, British Industrial Production and Manufacturing Production may spark Sterling movement.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high today of 1.4037.
