The Euro to Pound Sterling (EUR/GBP) exchange rate softened by around -0.18% on Friday morning.
With the rally from the positive Euro-area growth having reached a ceiling, the single currency edged lower on Friday morning as the situation in Greece continues to weigh on demand. Having fallen into recession, the cash-strapped nation has entered into talks to sell its largest port in order to raise much-needed cash.
The Pound, meanwhile, strengthened versus the majority of its most traded currency peers on Friday, The advance can be linked to positive results from March’s construction data which eclipsed the market consensus on the year.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7216.
Yesterday…
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending within a limited range on Thursday afternoon.
After having rallied significantly despite an absence of economic data, the shared currency softened versus many of its major peers towards the close of Thursday’s European session. This can be attributed to fears that the gains were overdone with geopolitical tensions in Greece showing no sign of resolution. The Pound is generally trending in a similar range to the start of the European session given the lack of domestic data to provoke significant changes.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7212.
Earlier…
The Euro to Pound Sterling (EUR/GBP) exchange rate strengthened by around 0.25% on Thursday afternoon.
Although Greece has fallen back into recession, the Euro strengthened versus the majority of its most traded currency competitors on Thursday. The appreciation can be linked to positive Euro-area growth and Germany moving further away from deflationary territory. This has meant that more analysts feel that if a Greek exit were to occur the Eurozone wouldn’t collapse in response.
The Pound, meanwhile, halted losses caused by Wednesday’s dovish Bank of England (BoE) Inflation Report after UK house prices rose. This rekindled the election rally to an extent which has seen the Pound strengthen versus the majority of its most traded currency rivals.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7228.
Euro (EUR) Exchange Rate Forecast to Rally versus the US Dollar despite Absence of Domestic Data
The mounting troubles with Greece have shifted from trader focus somewhat as recent growth data showed many positives for Euro-area nations. Eurozone growth bettered both the UK and the US in the first-quarter, stoked by the European Central Bank’s (ECB) program of quantitative easing. ECB President Mario Draghi stated ‘This recovery is conditional upon the full implementation of our monetary policy stance.’
However, not everyone shared the President’s confidence that the stimulus package is helping. ECB executive board member Benoît Coeuré said ‘the recovery is mainly supported by the decline in the Euro and weak energy prices, and those effects are likely to abate going forward.’ He added ‘It is up to governments in the Eurozone to act so that the recovery isn’t a flash in the pan and that long-term growth takes over from short-term sources of growth.’
The Euro to Pound Sterling (EUR/GBP) exchange rate dropped to a low of 0.7206 today.
Pound Sterling (GBP) Exchange Rate Forecast to Advance versus the US Dollar after House Prices Rise
The Pound’s election rally stalled on Wednesday after the BoE cut the year’s growth forecast from 2.9% to 2.5% and warned that inflation could fall into negative territory temporarily. The depreciation was short-lived, however after RICS House Price Balance eclipsed the median market forecast. House prices rose by 33% in April, bettering the market consensus of a 22% increase. The drop in house sales was linked to reluctance to move before the general election had concluded.
Although rising house prices is a positive for UK growth, the headline figure has stoked concern that house prices will become unaffordable for many and that the Conservatives will fail on their pledge to build 1 million new homes by 2020. ‘The affordability and availability of homes in the UK is now a national emergency and addressing this crisis must be the priority for the new government,’ RICS’s head of policy, Jeremy Blackburn, said.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Hold Gains on Lack of Data
With an absence of domestic data pertaining to either Europe or the UK to curb the trend, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to hold gains for the remainder of Thursday’s European session. Friday could see EUR/GBP volatility with British Construction Output due for publication.
The Euro to Pound Sterling (EUR/GBP) exchange rate climbed to a high of 0.7244 today.
