UPDATE
The Euro to Pound Sterling (EUR/GBP) exchange rate ticked lower by around -0.20% on Tuesday morning.
With time swiftly running out for Greece to secure financial aid, demand for the shared currency cooled significantly. Given that the likelihood that the Mediterranean nation will default on June’s International Monetary Fund (IMF) is very high, prospects for the Hellenic nation are not looking good at this juncture.
The Pound, meanwhile, is generally holding steady versus most of its major peers as traders await sales data due later on Tuesday. A fractional depreciation can be linked to anxieties regarding the 2017 European Union referendum and Prime Minister David Cameron’s assertion that he will campaign for a Brexit if concessions are not met.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7076.
The Euro to Pound Sterling (EUR/GBP) exchange rate edged higher by around 0.11% during Friday’s European session.
After having failed to make any progress towards securing bailout funds during Eurogroup talks in Riga, Greece is rapidly running out of time before June’s International Monetary Fund (IMF) payment. Should Athens fail to secure financial aid, the Hellenic nation will almost certainly default on the payment. With more and more officials speculating that a Greek exit from the Eurozone wouldn’t be a contagion, the prospect of a forced Grexit is a definite possibility.
Friday’s European session saw the shared currency edge higher versus many of its peers, however, thanks to positive domestic data which saw German growth meet with median market forecast figures.
The Pound, meanwhile, softened versus most of its major rivals during Friday’s European session as the prospect of the British referendum on European Union (EU) membership is weighing on investor confidence. With David Cameron set to talk with the EU Commission President on Monday, traders will be hoping that reform talks are successful in order to deter the British public from a Brexit.
Euro (EUR) Exchange Rate Forecast to Fluctuate on Greek Woes
With time as Greece’s enemy, the coming week’s trade is likely to be dominated by Athens’ struggle to secure bailout funds. If the Hellenic nation fail, the increased likelihood of a Greek exit from the Eurozone will see the common currency plummet. German Chancellor Angela Merkel said Friday there was still ‘very, very intensive’ work to be done before Greece can unlock aid. ‘It is clear that work has to continue with the three institutions. There is still a great deal to be done,’ she told reporters, referring to Greece’s talks with its troika of official creditors: the European Commission, the European Central Bank and the International Monetary Fund.
With a relatively quiet economic docket, domestic data will likely be less impactful with the shadow of geopolitics looming overhead. However, German Consumer Confidence and Retail Sales data has the potential to provoke changes for the single currency. Italian growth data may also be of interest to those invested in the Euro.
Pound Sterling (GBP) Exchange Rate Forecast to Alternate on Referendum Uncertainty
With a lack of significant domestic data to provoke volatility, the Pound is likely to see volatility caused by David Cameron’s attempt to reform the relationship between Britain and the EU. With that being said, however, the preliminary figure for first-quarter British Gross Domestic Product is likely to provoke changes for the British asset.
Should the British Prime Minister fail to secure any significant reforms prior to the EU referendum, British banks and businesses will fear that the British public will elect to leave. Should this be the case, the Pound is likely to soften amid uncertainty about the UK’s economic future. In the early stages of the talks, however, the Pound will fluctuate.
CBI Reported Sales, BBA Loans for House Purchase, GfK Consumer Confidence Survey and Nationwide House Prices may also provoke Sterling volatility over the coming week.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending within the range of 0.7092 – 0.7163 during Friday’s European session.