The EUR/GBP was little changed on Friday morning as trade of the currency pair was muted due to a lack of market moving data and as geopolitical concerns spooked investors.
With no UK data released and a bout of profit taking by investors the Pound was softer against most of its major peers, against the Euro it saw very little movement.
The already weakened Euro meanwhile saw the release of data which showed that the Eurozone’s current account surplus fell more-than-expected in May.
According to the European Central Bank the Eurozone’s current account surplus, a broad measure of an economy’s financial state fell in adjusted terms from the €21.6 billion recorded in April to €19.5 billion in May.
On an unadjusted basis the current account surplus totalled €8.9 billion in May, a sharp decline from the preceding months figure of €18.8 billion.
For the 12-month period that ended in May 2014, the cumulated surplus was 2.4% of the Eurozone’s gross domestic product, higher than the 2% in the 12 months to May 2013.
Earlier in the session the Euro slumped to a five-week low against the Japanese Yen and weakened against other major peers as concerns over an escalation in the conflict in Ukraine damaged sentiment towards the single currency.
The tensions between the West and Russia have already had a negative effect upon the region’s economy and a further deterioration in relations is likely to have further negative effects.
The Pound is forecast to make further gains against the Euro in the coming weeks as data continues to show the diverging trends between the UK and Eurozone economies and as further Sterling gains against the US Dollar are unlikely as the US economy improves.
‘If you look at Euro-Sterling, it’s a pretty textbook downturn. Cable’s been a pretty sizable uptrend for the past year and a half, but there’s a whole host of signs that say, from the perspective of momentum pattern recognition as well as a whole bunch of resistance areas that further gains should be limited,’ said Bank of America’s head of technical strategy in an interview with Bloomberg earlier in the week.
So far this year the Pound has strengthened by 5% and is on track to make its best annual gain since 2009.
Euro Exchange Rate News:
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