UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending within a tight range on Tuesday morning.
As traders await British economic data due for publication later on Tuesday morning, the Pound is generally holding steady versus its major peers. The Euro, meanwhile, is still trading relatively statically as caution regarding Greece dampens volatility. Athens have been given just hours to prepare and submit proposals for securing financial aid.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4118 today.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.58% on Monday afternoon.
Pound Sterling (GBP) Exchange Rate Forecast to Edge Higher against Euro after New Car Registrations see Record Half-Year
With a lack of influential domestic data to drive changes, the Pound is generally holding steady versus its major competitors. A fractional depreciation can be linked to a reluctance to invest with so many unknowns in Europe at this time. Given that the Eurozone is Britain’s largest trading partner, the knock on effect from a Greek exit could weigh on British exports; although the Bank of England (BoE) is confident any contagion would be limited.
The Pound did, however, edge higher versus its peers after New Car Registrations rose by 7.0% in the first half of 2015; the highest half-year performance on record. The large growth in vehicle purchases was stoked by Britons buying more British cars with UK-built cars seeing a five-year high proportion on new car registrations.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4098.
Euro (EUR) Exchange Rate Forecast to Decline against the British Pound ahead of ECB ELA Decision
The landslide 61% majority victory for the ‘no’ vote in the Greek austerity referendum has shaken up the currency market, with the Euro on the brink of a large depreciation. The shared currency weakened at the news, avoiding a greater declination as traders awaited an announcement from the European Central Bank (ECB). Greek banks have been kept afloat by the ECB providing Emergency Liquidity Assistance (ELA), but now that Greece is looking increasingly likely to default on ECB loan repayments, there’s no guarantee the program will continue. Even if the ECB decides to maintain the capped level of ELA, many analysts fear banks only have days left before collapse.
Greek Prime Minister Alexis Tsipras will have to make negotiations swift, but many are questioning whether the Eurogroup of finance ministers will be willing to compromise despite the overwhelmingly negative response to austerity measures in Greece. The potential for a Greek exit from the Eurozone is heightened because the risk of contagion is minimised with the ECB’s quantitative easing program.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.4037 today.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Gains, Sustained Single Currency Weakness amid Geopolitical Uncertainties
Given that there are so many uncertainties surrounding Greece and the future of the 19-nation currency bloc, the shared currency is likely to see a sustained bearish period. Therefore, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to hold gains for the remainder of Monday’s European session. With that being said, the ECB decision could see GBP/EUR fluctuations.
European economic data is unlikely to be particularly impactful with geopolitics dominating trade, but Tuesday’s British data has the potential to provoke Sterling movement. Industrial and Manufacturing Production will be of interest, as will the NIESR Gross Domestic Product Estimate.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.4144 today.
