The Euro to Pound Sterling (EUR/GBP) exchange rate was trending within a limited range on Wednesday morning.
The shared currency edged higher versus most of its major peers on Wednesday as Eurozone officials meet to discuss Greece for the third time in a week. Many traders are optimistic that the Hellenic Nation can secure aid before the bailout deadline expires.
The Pound, meanwhile, advanced versus many of its peers after a significant declination over the past few days. After locking in profits caused the Pound’s decline, traders have readjusted Sterling positions to bring the UK asset back to justified levels.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7108.
Yesterday…
The Euro to Pound Sterling (EUR/GBP) exchange rate softened by around -0.80% on Tuesday afternoon.
The shared currency softened versus its major peers on Tuesday after the European Commission gave Greece just 48 hours to secure aid. Whilst the latest set of reforms were met with enthusiasm there is still some way to go and many fear that Greek Prime minister Alexis Tsipras will fail to convince fellow Syriza party members to agree to aggressive austerity measures.
The Pound, meanwhile, is generally trending lower after a sustained period of trader profit-locking following last week’s surge. CBI Trends data, due for publication later on Tuesday morning, has the potential to buck the trend should the reports print positively.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7103.
Euro (EUR) Exchange Rate Forecast to Trend Lower against the British Pound despite Positive German and Eurozone Data
After the Eurogroup Summit to discuss Greece concluded, the Euro declined. Although it was good news that the latest set of proposals submitted by Athens were met with greater enthusiasm than previous iterations, many fear that Tsipras will not be able to convince the hardened left of Syriza to agree to reforms which compromise electoral red lines.
European data printed positively on Tuesday although the results have been somewhat overshadowed by the situation in Greece. The preliminary figures from Eurozone Manufacturing, Services and Composite PMIs all bettered estimates in June. In addition, the preliminary results for German Manufacturing, Services and Composite PMIs all eclipsed median market forecast figures.
Commenting on the Eurozone flash PMI data, Chris Williamson, Chief Economist at Markit said; ‘The PMI is signalling GDP growth of 0.4% for the region as a whole in the second quarter. The upturn is also looking encouragingly broad-based. The German PMI continues to signal robust GDP growth, and France – the latecomer to the recovery – enjoyed its best quarter for almost four years. Outside of France and Germany, the June survey rounded off the best quarter for eight years in terms of output growth, and the best job creation since the third quarter of 2007.’
Pound Sterling (GBP) Exchange Rate Forecast to Advance against the Shared Currency after European Data Supports British Trade
Although the positive European data hasn’t had a huge impact on the single currency, the Pound advanced in response as the improvement in the Eurozone is positive for British trade. However, the Pound is still trending in a relatively weak position after the recent Sterling rally was pared back due to a sustained period of trader profit-taking.
Later on Tuesday morning, CBI trends Total Orders and CBI Trends Selling Prices are due for publication. Although these reports don’t have a large economic weighting, positive results could curb the current GBP downtrend.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Hold Losses ahead of UK CBI Trends Data
With fears that Tsipras will not be able to please both creditors and party members mounting, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to hold losses for the remainder of Tuesday’s European session. With that being said, poor results from British data could trim the Pound’s current gains against the common currency. Wednesday ought to see EUR/GBP volatility with German and British data due for release.
The Euro to Pound Sterling (EUR/GBP) exchange rate climbed to a high of 0.7118 today.
