The Pound Sterling to Euro (GBP/EUR) exchange rate declined by around -0.42% on Thursday morning.
After a very disappointing report from the ONS with regards to British workforce production, or lack thereof, the Pound slumped significantly. Thursday has seen a continuation of the declination as traders await construction data due later on Thursday morning.
The Euro, meanwhile, strengthened versus most of its major competitors after Greece submitted yet another reform proposal. Given that this is one of several revisions to the original proposal, there is a higher likelihood that it will be accepted by creditors.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3715.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.43% on Wednesday morning.
Although British manufacturing data printed in line with expectations, the Pound edged lower versus many of its most traded currency rivals. The declination is as a result of the weight of the forthcoming general election continuing to stymie investor confidence.
The Euro, meanwhile, advanced versus many of its major peers after having declined significantly over the past few days. The appreciation is as a result of better-than-expected manufacturing data and traders readjusting positions on an unjust declination. However, the continued issues between Greece and its creditors are likely to see the single currency return to bearishness in the long-term.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3748.
Pound Sterling (GBP) Exchange Rate Edges Loweron Political Uncertainty
The forthcoming general election has been described as one of the most hotly contested in modern political history. Certainly opinion polls indicate no clear majority for any of the UK’s dominant political parties. Therefore, the likelihood is that the UK will see a hung parliament which could lead to massive changes in policy. These political uncertainties are weighing heavily on investor confidence.
The general election has dominated trader focus which has meant domestic data has been less impactful despite its positivity. The Manufacturing PMI equalled the median market forecast of a rise from 54.0 to 54.4 in March on a seasonally-adjusted basis.
Rob Dobson, Senior Economist, stated; ‘The UK manufacturing sector has continued its bright start to 2015, with March seeing the headline PMI rise to an eight-month high. The sector is on course for output growth ranging around 0.6% over the opening quarter as a whole, a positive contribution to broader economic expansion and its best performance since the first half of last year.’
The Pound Sterling to Euro (GBP/EUR) exchange rate has fallen to a low of 1.3747 today.
Euro (EUR) Exchange Rate Strengthens on Unwarranted Depreciation
The ongoing tension between Greece and creditors has seen the shared currency decline significantly for a long period. However, the Euro recovered a fraction of its losses on Wednesday as traders feared the depreciation was unjustified. Having already priced-in the potential for a Grexit, the shared currency is likely to continue to advance for the remainder of Wednesday’s European session.
Aiding the single currency recovery was better-than-expected domestic data. Italian, French, German and Eurozone Manufacturing PMIs all bettered their respective median market forecast figures in March.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Losses
Given the lack of domestic data to curb the trend, and with the situation in Greece showing no signs of any immediate changes, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to hold losses for the remainder of the European session.
A lack of European economic data on Thursday ought to see geopolitics resume domination in terms of trader focus.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.3826 today.
