The Euro (EUR) to Pound (GBP) Sterling Exchange rate softened by 0.2% on Monday as investors look ahead to data due to be released by the Bank of England (BoE), in particular Wednesday’s inflation and unemployment reports.
Investors are expecting Wednesday’s inflation report to offer some insight as to the future direction of interest rate rises.
Sterling had enjoyed a long run of gains against most of its major peers but last week saw the currency falter and soften as speculators and hedge funds reduced their bullish outlook.
A bout of profit taking on concerns over geopolitical matters also sent the Pound lower against its peers on Friday.
‘In terms of key events this week, it would be the Inflation Report. Long Sterling is one of the largest positions in G10 FX, but this long Sterling positioning has been pared back the last couple of weeks. If we do continue to get an indication from Carney that rate hikes are on schedule for November, then there’s scope for Sterling to rebound this week,’ said a foreign exchange strategist from BNP Paribas SA.
Sterling also managed to ease away from a two-month low against the US Dollar on Monday as demand for the safe haven ‘Buck’ eased slightly as concerns over tensions in Ukraine and the Middle East softened.
A ceasefire, which has held for the past 72-hours in Gaza and the ending of Russian military exercises improved sentiment.
The Euro however remained weaker against most major peers including the ‘Greenback’ on fears that a ban by Russia on European food goods is beginning to have a negative impact upon the Eurozone economy.
The single currency was also under pressure from a Bloomberg News survey, which showed that Germany probably underperformed Spain in the last quarter as the region’s economic recovery halts.
Tuesday’s ZEW sentiment Index report is forecast to come in negatively and send the Euro lower against its peers.
Also due is sentiment data out of Germany and inflation data out of Portugal. Both are expected to show declines.
EUR to GBP Softens Following Poorer-Than-Forecast ZEW Data
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7949.
Following unimpressive ZEW Economic Sentiment data the Euro to Pound exchange rate softened today.
The Eurozone ZEW survey for Economic Sentiment showed a fall from the previous figure of 48.1 to 23.7. Simultaneously the German ZEW survey for Economic Sentiment posted a shocking declination from the forecast figure of 17.0 to 8.6.
Whilst geopolitical unease remains the focus of investors, the Euro to Sterling exchange rate is likely to continue on this downward trend.
The Euro to Pound Sterling (EUR/GBP) exchange rate has fluctuated between a low of 0.7941 and a high of 0.7980.
Euro Exchange Rate News:
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