The Euro to GBP exchange rate achieved a one-week high on Thursday as investors ditched the Pound ahead of next week’s Bank of England rate decision.
A plethora of upbeat economic reports for the UK had led to some industry experts betting that the BoE would introduce a rate increase before the spring of 2015 (as had been tentatively scheduled earlier in the year) and the Pound soared as a result.
However, after hitting a 17-month high against the Euro the Pound has tapered off and is now sinking against several of its most-traded currency counterparts.
Various industry experts and several BoE officials have intimated that interest rates will remain on hold for the foreseeable future no matter what upbeat UK reports emerge.
This week the Pound has also come under pressure as a result of below-forecast domestic data releases, such as Tuesday’s mortgage approvals report.
The Euro, on the other hand, was supported on Wednesday by better-than-expected sentiment reports for the currency bloc.
Euro to GBP fluctuations are likely to occur before markets close for the weekend.
At 00:05 GMT the UK’s GfK consumer confidence survey for May will be published.
The index is expected to have risen from -3 to -2 and if the actual result meets or exceeds this target the Pound could rally against its European rival overnight.
However, the direction taken by the EUR/GBP pairing will be dictated by Germany’s retail sales report as European trading continues.
Month-on-month sales are forecast to have increased in April.
Italy’s consumer price index will also be of note.
Next week’s central bank meetings may be the cause of considerable market movement.
The BoE is unlikely to issue any policy changes, but the European Central Bank is expected to deploy additional stimulus.
If the central bank introduces an interest rate cut, a negative deposit rate, a bond buying scheme or a combination of these measures the Euro could post widespread declines, giving the Pound a chance to recover lost ground.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3597,
Euro,,British Pound,0.8142,
Euro,,Australian Dollar,1.4655,
Euro,,New Zealand Dollar,1.6055,
Euro,,Canadian Dollar,1.4749,
[/table]
