The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.43% on Tuesday morning.
As traders await the fourth-quarter British Gross Domestic Product final figure, the Pound edged higher versus the majority of its most traded currency rivals after consumer confidence bettered estimates. The Pound is unlikely to see any significant appreciation, however, with political uncertainties hindering investor confidence as we draw ever closer to the general election.
The Euro, meanwhile, softened after Greece’s latest reform proposal was, once again, rejected by creditors. Speculation is mounting that the Greek government will have no choice but to form an alliance with Russia in order to get the required funding to prevent a complete financial crisis. Positive data out of Germany has had minimal impact with geopolitics dominating trader focus.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3734.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange was trending within a tight range on Monday morning.
Although British economic data was varied in terms of results, the ecostats had minimal impact on Sterling movement. This is mostly due to general positive sentiment towards the Bank of England (BoE) after Governor Mark Carney stressed that a cash rate increase is still very much in the central bank’s sights.
The shared currency, meanwhile, strengthened fractionally after Eurozone economic confidence rose despite the situation in Greece. However the Euro is still holding losses versus most of its major peers amid speculation that Greece’s program for reform will be rejected by creditors.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3660.
Pound Sterling (GBP) Exchange Rate Holding Steady on Carney Assurances
After BoE Chief Economist Andrew Haldane stated that the likelihood of a benchmark rate cut was as likely as a rate increase, the Pound slumped significantly. However, Friday saw Governor Mark Carney dispel this notion with reassurances that a rate increase is still well within reach. Carney is the latest of a succession of policymakers to reject Haldane’s comments.
‘The truth is that if Andy had felt that strongly he would’ve voted for a rate cut. What we do is we vote on interest rates today. We do not vote on them in the future,’ Ben Broadbent, one of the Bank’s deputy governors, told the newspaper in an interview.
The Pound Sterling to Euro (GBP/EUR) exchange rate has fallen to a low of 1.3627 today.
Euro (EUR) Exchange Rate Edges Lower despite Positive Data
The shared currency is unlikely to make any significant gains until more is known about the acceptability of Greece’s program of reform. Given all of the difficulties preceding this latest attempt at reformation, the lack of investor confidence is not surprising.
However, a positive result from Eurozone economic sentiment, even amid such tensions surrounding Greece, has seen Euro losses trimmed. ‘We have tailwind for the Eurozone economy like rarely before with a combination of cheap oil, a weaker Euro and extremely low financing costs,’ said Holger Schmieding, chief economist at Berenberg in London. ‘At this point, even Greek irritations are unlikely to deter economic sentiment.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Fluctuate
Given that the highly significant German inflation data is due for publication later on Monday afternoon, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to fluctuate. However, with the situation in Greece still weighing heavily, the single currency is unlikely to establish a bullish run.
Tuesday is likely to see heightened GBP/EUR volatility with British fourth-quarter growth data and German labour market data due for publication.
The Pound Sterling to Euro (GBP/EUR) exchange rate reached a high of 1.3708 today.
