The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.30% on Wednesday afternoon after advancing to a four-week high the previous day.
After Bank of England (BoE) official Martin Weale stated that the improving jobs market could see a sooner-than-expected benchmark interest rate hike, the Pound advanced versus many of its currency rivals. The appreciation was somewhat slowed, however, after the BBA Loans for House Purchase figure failed to meet with forecast growth.
The Euro, meanwhile, gained versus many of its peers as Eurozone officials meet for the third time in a week to hash out a deal with Greece. As the Hellenic nation shows less reluctance to proposed austerity measures in the face of looming debt repayments, many traders are optimistic that a deal can be reached soon.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4037.
Pound Sterling (GBP) Exchange Rate Forecast to Hold Steady against the Shared Currency (EUR) after Hawkish Weale Stokes Interest Rate Hike Bets
The Pound advanced against its peers on Wednesday morning thanks to comments from BoE Policy Maker Martin Weale. He stated that Britain’s labour market is ‘fizzing away nicely’ with special mention of accelerated wage growth. In an interview with the Financial Times, Weale hinted that he would be voting for a cash rate increase within the year. ‘If you’d asked me last autumn how rapidly I thought wages might pick up, looking at the most recent numbers, the movement seems to have been a bit faster than that,’ he said.
The Sterling rally has tailed off somewhat, however, after domestic data failed to meet with median market expectations. May’s BBA Loans for House Purchase was forecast to increase from 42020 to 43350, but the actual result only reached 42530. ‘The numbers show that the property market remains buoyant after the general election,’ said Richard Woolhouse, chief economist at the BBA. ‘Personal borrowing by British families also seems to be strong -– the uptake of personal loans and credit card borrowing is further proof of consumers’ confidence.’
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.4056 today.
Euro (EUR) Exchange Rate Forecast to Trade Statically against the British Pound Despite Disappointing German Data
In general, European economic data printed disappointingly on Wednesday. June’s German IFO Business Climate, German IFO Current Assessment and German IFO Expectations all fell below the respective market consensuses. However, the disappointing domestic data hasn’t been greatly impactful with trader focus dominated by proceedings in Greece.
Eurozone finance ministers meet in Brussels today, the third meeting within a week. Many are going so far as to suggest that the meeting will not conclude until a deal is reached before the summit on Thursday. The sheared currency advanced versus its peers amid optimism that Greek officials will be able to strike a deal, a feeling helped by the latest proposal submission, which showed Athens had addressed some of the requests from creditors.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Fluctuate Today after Brussels Meeting
In terms of Pound Sterling to Euro (GBP/EUR) exchange rate movement, much rests on the Eurozone finance ministers meeting in Brussels. Should the Eurogroup reach a deal with the Hellenic nation, the common currency will rally across the board. The opposite would likely occur if the meeting bears no fruit.
Thursday’s economic data has the potential to provoke changes for the GBP/EUR pairing. German Consumer Confidence and UK CBI Reported Sales have the potential to impact on the exchange rate, although geopolitics in Europe will still hog the limelight.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.4109 today.