The Pound Sterling to Euro (GBP/EUR) exchange rate jumped in Tuesday’s European session despite upbeat Markit data.
Markit’s Eurozone Manufacturing Purchasing Managers Index (PMI) rose from 52.2 to 52.5 in June, while Markit’s Eurozone Services PMI rose from 53.8 to 54.4. The Composite PMI rose from 53.6 to 54.1.
However, the main event this week is the possibility of a deal between Greece and its creditors. This week started with some dramatic progress and, industry experts are suggesting a deal could be made before the weekend.
Euro (EUR) Exchange Rate Forecast to Climb on Positive Signs of Greek Deal
Market analyst Jameel Ahmal commented: ‘If recent history is anything to go by, there is likely to be a few more twists and turns before a deal is concluded but this is at least a positive sign.’
‘The strong gains in global markets just shows how much investors want a deal to be reached and everyone would much prefer it to be this way, rather than for the uncertainty over a looming default.’
Greek Prime Minister Alexis Tsipras scared investors last week when he went to Russia and made a speech suggesting that Greece was ‘not afraid of heading to new seas and reaching new harbours.’
Since his speech it appears as if creditors have ramped up their action and Greece has compromised on reforms.
Industry expert Michael Hewson commented: ‘There does appear to have been some shifting of ground on the Greeks part on pensions and VAT, as well as higher taxes on business, though with unemployment at record levels, increasing the level of taxes on business on their profits, as well as their employees does sound rather counterproductive, given that an estimated 8,500 businesses have closed since the beginning of the year already.’
Greek PM Alexis Tsipras may Struggle to Pass Reforms through Parliament – Euro (EUR) Exchange Rate Falls
However, it may not be smooth sailing ahead as signs are growing that Greek PM Alexis Tsipras will have a problem getting the reforms accepted by parliament.
Vice president of the 300-seat House Alexis Mitropoulos commented: ‘My personal view is that these measures cannot be voted, they are extreme and anti-social. I believe that in the end, this package which you have at hand, cannot come to the Greek parliament.’
The full scorecard of measures from the Greek reform/bailout proposals today. VAT reform and pensions raise the most pic.twitter.com/FaWo87dYbe
— Ed Conway (@EdConwaySky) June 22, 2015
#Greece Headlines
Ta Nea: 8bn Cuts and They Want More!
EtS: Toward a Harrowing Compromise
ET: Shock Memorandum pic.twitter.com/8Zswmdt9Hl
— Derek Gatopoulos (@dgatopoulos) June 23, 2015
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Fluctuate on UK BBA Loans for House Purchase
Meanwhile, the Pound Sterling (GBP) exchange rate is likely to be in for a quiet week by way of domestic data with very few ecostats worth noting. Tuesday will see the release of the UK CBI Trends Total Orders and CBI Trends Selling Prices stats and although they’re not of high influence, they may be capable of moving the Pound (GBP) due to the lack of other data.
Wednesday will be the most notable day for UK data with the release of the BBA Loans for House Purchase stat. The figure is expected to come in at 43350 in May, after April registered 42116.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.4036.
The Euro to Pound Sterling (EUR/GBP) exchange rate is trending in the region of 0.7127.