The Euro to Pound Sterling (EUR/GBP) exchange rate was trending within a narrow range on Wednesday morning.
As traders await Bank of England (BoE) minutes from the most recent policy meeting, the Pound is generally holding steady versus the majority of its most traded currency rivals. The Euro, meanwhile, is also holding relatively steady after a significant declination on Tuesday. Domestic data is unlikely to have too great an impact, however, with geopolitics in Greece dominating trader focus.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7189.
Yesterday…
The Euro to Pound Sterling (EUR/GBP) exchange rate softened by around -0.40% on Tuesday afternoon.
With Athens forced to scrape together as much cash as it can get from local governments, and with mounting speculation that Greece will be unable to juggle pleasing creditors and the people who voted against austerity, it is of little surprise that the single currency softened versus the majority of its most traded currency rivals on Tuesday. Aiding the common currency downtrend was a drop in German economic sentiment.
The Pound, meanwhile, edged lower versus the majority of its most traded currency competitors with a complete absence of domestic data to provoke changes. The depreciation is the result of trader reluctance to invest ahead of the conclusion of the general election.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7179.
Euro (EUR) Exchange Rate Dies on German Economic Sentiment
After the German ZEW Economic Sentiment Survey failed to meet with the median market forecast of a rise from 54.8 to 55.3 in April, with the actual data dropping to 53.3, the shared currency softened versus the majority of its most traded currency competitors. ‘The current weakness of the world economy is dampening export prospects and reducing the scope for further improvements of the economic situation in Germany,’ ZEW President Clemens Fuest said.
As the situation in Greece gets direr with every passing day, and the likelihood of the nation exiting the Eurozone increases; the single currency has been unable to sustain any significant gains. The depreciation was aided on Tuesday after Athens had no choice but to pool resources from local governments in order to stay afloat.
The Euro to Pound Sterling (EUR/GBP) exchange rate has fallen to a low of 0.7167 today.
Pound Sterling (GBP) Exchange Rate Softens on Political Uncertainty
With a complete absence of domestic data to provoke movement for the British asset, the Pound softened versus the majority of its most traded currency counterparts. The declination is as a result of fears of a massive policy overhaul as we draw ever closer to the general election.
With 16 days to go until the conclusion of the general election, there is still no clear indication as to a frontrunner and mounting speculation that the UK will get a coalition or hung parliament is having a detrimental effect on investor confidence. Opinion polls are giving varied results, and none are indicating a majority, which is further evidence of just how closely fought this general election will be.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Hold Losses
Although the general election is weighing heavily on demand for the Pound, the situation in Greece trumps the election in terms of the damage to investor confidence. Therefore, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to hold losses for the remainder of Tuesday’s European session.
Wednesday ought to see heightened EUR/GBP volatility with Eurozone Consumer Confidence data due for release. Additionally, Bank of England (BoE) minutes from the most recent policy meeting will impact upon the pairing.
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced to a high of 0.7211 today.