Pound Sterling to Euro (GBP/EUR) Exchange Rate Buoyant, further Gains Ahead?
The Pound Sterling to Euro (GBP/EUR) exchange rate continued trending in a stronger position ahead of Bank of England (BoE) Governor Mark Carney’s testimony to Parliament.
If the BoE chief indicates that interest rates will need to be increased in order to prevent domestic inflation overshooting the central bank’s 2% target by 2016, the Pound is likely to extend gains.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3652.
GBP/EUR Exchange Rate Bullish before German Growth, CPI Data
The Pound Sterling to Euro (GBP/EUR) currency pair returned to trending in the region of 1.3626 on Monday after advancing by more than 0.7% on the day’s opening levels.
A far steeper-than-anticipated decline in the Confederation of British Industry’s reported sales index had little impact on GBP/EUR trading, with the Pound remaining strong as a result of ongoing Greek uncertainty.
Sterling could extend gains against the Euro tomorrow if either Germany’s final growth or final CPI data is negatively revised.
Investors with an interest in the GBP/EUR pairing will also be focusing on a speech to be given by European Central Bank (ECB) President Mario Draghi in Frankfurt and the testimony of Bank of England (BoE) Governor Mark Carney.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3636
GBP/EUR Exchange Rate Advances 0.3%
The Pound Sterling to Euro (GBP/EUR) exchange rate recovered some of its recent losses early in Monday’s European session as the common currency was pressured lower by sub-par German data.
The German IFO Business Climate report had been expected to advance from 106.7 to 107.7 in February, but it only managed to gain to 106.8.
Similarly, rather than climbing from 111.7 to 112.5 as expected, the Current Assessment gauge slipped to 111.3.
Finally, the Expectations index printed at 102.5 in February – up fro, 102 in January but less than the reading of 103 forecast.
Greek debt deal concerns also contributed to the Euro’s losses. Greece is set to present a list of reform measures later today, and the Eurogroup must approve the proposal before granting the nation a four-month extension of its current bailout programme.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3563 on Monday.
On Friday the Pound Sterling to Euro (GBP/EUR) exchange rate declined as Greece finally reached an agreement with its creditors.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Falls to 1.3522 as Greece Forms Deal with Eurogroup
After lengthy discussions in Brussels, the Eurogroup announced that Greece has been granted a four-month extension of its financial rescue programme.
Reports indicate that Greece intends to honour its debt obligations and will be presenting an initial list of reforms by Monday. The nation’s finance minister implied that the four-month time period will be used to improve relations with the International Monetary Fund.
Dutch Finance Minister and head of the Eurogroup Jeroen Dijsselbloem said of the development; ‘I think tonight was a first step in this process of rebuilding trust. As you know trust leaves quicker than it comes. Tonight was a very important, I think, step in that process.’
BBC News noted; ‘Certainly the Germans have won on the issue of form – in that Greek Finance Minister Yanis Varoufakis has in the end agreed to a four-month extension of the current bailout, which is something his government swore it would never do. Also, the monitors and enforcers of the agreement will remain Brussels, the IMF and the European Central Bank – the so-called troika so hated by Syriza (although the statement carefully avoids using the loathed term for the three-legged stool).’
As this deal significantly reduces the odds of a Greek exit from the Eurozone, the Euro rallied after it was formed.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast – UK Consumer Confidence Data Ahead
The UK economic calendar is looking a bit emptier next week, but there are a couple of reports with the potential to initiate Pound Sterling to Euro (GBP/EUR) exchange rate volatility.
The Confederation of British Industry’s reported sales figure is scheduled for release on Monday and the BBA Loans for House Purchase number is due out on Wednesday.
Thursday’s final fourth quarter growth data is perhaps the week’s most important UK report.
Given that the nation’s Manufacturing, Services and Construction Purchasing Managers Indexes for December came in above estimated levels, it is possible that the initial growth estimate of 0.5% quarter-on-quarter could be positively revised.
A stronger rate of expansion at the close of 2014 would be Pound supportive.
Lloyds Business Barometer is also due out on Thursday but is unlikely to cause any GBP/EUR shifts.
The week closes with the GfK Consumer Confidence Index. The gauge of sentiment printed at 1 in January and investors will be hoping for an improvement. However, with the general election fast approaching and commodity prices tumbling, it’s possible that the index returned to negative territory in February.
Reports from the Eurozone, including Germany’s employment figures and Business/Industrial/Economic/Services confidence gauges for the Eurozone as a whole, will also have an impact on GBP/EUR movement.
At the close of the week the Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3514
The Euro to US Dollar (EUR/USD) exchange rate was trading in the region of 1.1383
The US Dollar to Euro (USD/EUR) exchange rate was trading in the region of 0.8806
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7407
On Sunday the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3507