The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.11% on Friday afternoon.
British Pound (GBP) Exchange Rate Forecast to Trend within a Close Range against the Single Currency (EUR) after British Trade Deficit Narrows
After depreciating considerably over the course of the week, the Pound recovered some of its losses on Friday. This is mainly due to concerns that the recent declination was unjustified considering UK data registered mostly positive results and Chancellor George Osborne’s budget was generally hawkish.
Friday has seen the British asset strengthen versus the majority of its closest rivals after domestic data produced positive results. May’s Balance of Trade was expected to see the deficit narrow from -1.834 billion to -1.4 billion, but the actual result narrowed further to just -0.393 billion. This effectively allays many fears regarding the impact of damp demand for British exports in Europe amid geopolitical upheaval in Greece. However, UK Construction Output fell short of the median market forecast of 0.8% growth in May, with the actual result seeing monthly contraction of -1.3%.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3881.
Euro (EUR) Exchange Rate Forecast to Trend within a Limited Range against Pound Sterling as Tsipras Urges Syriza to Approve Reforms
Although Greek Prime Minister Alexis Tsipras stated that the ‘No’ vote victory in the austerity referendum would give him greater leeway to negotiate a better deal for Greece, the latest reform proposal contains harsher austerity measures than that of the proposal rejected by 61% of the Greek people. Whilst, on first sight, European official have shown confidence that these reforms will pass scrutiny, there is no guarantee that the hardened-left Syriza back benchers will allow Tsipras to move forward with the measures proposed.
Another potential stumbling block for Greece is Germany, as the nation owns the majority of Greek debt. One of the keys for Tsipras to push for harsher austerity back home is to have some form of debt relief. This subject has been a big divider between the two nations and could prove a deal breaker. German Chancellor Angela Merkel has been urged by many European officials to relax her stance on debt relief in favour of avoiding a deepening crisis.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3840 today.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Soften as Greek MPs Prepare to Debate Proposals
Greek MP’s will gather tonight to debate and vote on whether the fresh reform proposal from Tsipras is acceptable. Many analysts are speculating that the government will agree given the fragile sheet of ice Greece is resting on at present. This optimism is likely to see the Pound Sterling to Euro (GBP/EUR) exchange rate edge lower over the course of Friday’s European session.
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced to a high of 1.3913 today.
