- Pound Sterling Euro Exchange Rate Holds Near 1.15 – But could slip if EUR gains on USD weakness again
- Trump Win Shocks Global Markets – Pound resists cross flows as Euro fluctuates
- Trump Forecast: Euro Could See Short to Mid-Term Strength – US Dollar jitters could be prolonged
- GBP EUR Forecast: Will Pound End Week Higher? – Lack of upward factors for Euro
Pound Sterling Euro Exchange Rate Surges on UK-US Trade Hopes
The Pound Sterling Euro exchange rate continued to defy expectations on Thursday afternoon and towards the end of the European session looked to be on track to finishing another of its best daily runs in weeks.
GBP EUR hovered above the key level of 1.15 at various points in the afternoon thanks to comments from President-to-be Donald Trump that he valued the US’ relationship with the UK.
Speculation on the rise of populism in other developed nations also caused investors to rethink their positions on the Pound.
As it stands, unless Trump makes a statement that undermines trade hopes GBP EUR is on track to finish the week over a cent above its opening levels.
(Previously updated 12:45 GMT 10/11/2016)
The Pound Sterling Euro exchange rate surprised many by being able to hold its Wednesday gains throughout Thursday morning. By the early afternoon, GBP EUR continued to trend with an upward bias and reached above the level of 1.14 multiple times.
Sterling appeared to be trending strongly due to hopes that a post-Brexit Britain would have a good relationship with Trump’s USA, while the Euro was held back by concerns of extended easing measures from the European Central Bank (ECB).
(Previously updated 16:42 GMT 09/11/2016)
Pound Sterling Euro Exchange Rate Rises as Markets Adjust from Shock Trump Win
Reversing the convincing trend seen earlier in the day, the Pound Sterling Euro exchange rate soared on Wednesday afternoon as investors readjusted their positions on the day’s shocking US election results.
The US Dollar recovered from its worst levels as investors cooled, with some suggesting a December Fed rate hike was still likely and others making use of the currency’s ‘safe haven’ status.
Meanwhile, comments from the European Central Bank (ECB) that officials were prepared to act on market shock if necessary weighed on the Euro.
Sterling, on the other hand, was bolstered by comments from President-to-be Donald Trump that Britain could be first in line for a post-Brexit trade deal with the US.
Towards the end of the European session, GBP EUR even briefly reached as high as 1.14 before slipping back down to 1.13.
(Previously updated 12:42 GMT 09/11/2016)
As Wednesday progressed, the Pound Sterling Euro exchange rate’s movements became softer, with the pair slipping back up to nearer the week’s opening levels as the worst of the shock subsided.
However, the Euro still remained in a strong position throughout the day due to the US Dollar’s weakness, and is likely to trend with an upside bias for the coming days as a result.
(Published 11:56 GMT 09/11/2016)
The Pound Sterling Euro exchange rate has seen a direct influence from the shocking US 2016 Presidential Election win of unorthodox Republican Donald Trump. While his acceptance speech cooled markets from their highest panic levels, the Euro still strengthened against Sterling.
GBP EUR had fluctuated relatively flatly in the region of 1.12 throughout the week so far, but plunged to a low of 1.10 when markets realised a Trump win was likely in an eerily similar situation to the Brexit vote earlier this year. GBP EUR has since recovered to near 1.12 again.
Pound Euro (GBP EUR) Pushed around in Trump Trade Cross-Flows
The Brexit-worn Pound has become increasingly used to being driven by non-domestic factors; largely movements in other currencies. On Wednesday, the Pound was driven by cross-flows from currencies hit directly by the US Presidential election result.
Donald Trump’s Presidential win had the effect many analysts expected. Due to his unorthodox and protectionist economic and foreign policies, markets panicked and sold off the US Dollar.
Sterling’s movements throughout the day thus far have largely been in response to that market movement. The Pound slumped against the Euro and other relatively safe currencies that investors rushed to while selling the US Dollar, but was able to advance against risky currencies.
Euro Pound (EUR GBP) Benefits from US Dollar Selloffs Throughout Wednesday
Due to the wide use of the USD EUR exchange rate, the Euro easily became one of Wednesday’s most appealing currencies. With investors selling USD EUR in droves, the Euro advanced and many other traders bought into the shared currency looking to ride the wave.
This helped the Euro to easily advance against the Pound on Wednesday, making it the shared currency’s biggest upwards streak against Sterling since last week’s Article 50 news.
While markets were initially in quite a state of shock over the news that Trump had won the US Presidency, there isn’t the level of Brexit-related shock that some analysts expected despite the familiarity of the situation.
Markets cooled significantly after Trump made his Presidential acceptance speech, for example. In an uncharacteristically calm and ‘Presidential’ speech for the incoming world leader, there was no mention of building walls or other controversial policies.
This caused sharp shifts in the markets to reverse slightly. As a result, the bullishness of the Euro Pound exchange rate diminished slightly later in the morning.
Pound Sterling Euro Exchange Rate Forecast: How Long Until Markets Cool?
The Pound is unlikely to see as strong a direct effect to this market panic as the Euro. With investors now all-too-familiar with Sterling’s regular Brexit-related drops, GBP is unlikely to be highly appealing in this time of volatility and uncertainty.
As a result, the Euro has a significant upside factor to it for the next few days and potentially even the next few weeks depending on how the situation develops. Extended periods of weakness for the US Dollar will continue to be bullish for the shared currency.
Incoming US President Donald Trump will not take office until January 2017, when he will meet with Barack Obama at the White House as his successor.
Until then, markets will be left with uncertainty on whether Trump will be as unorthodox a President as he was an election candidate.
If Trump continues to exhibit a shift in behaviour towards more Presidential tones in the coming days and weeks, markets could calm quicker than expected, which would diminish the US Dollar’s effect on Pound Sterling Euro exchange rates.
However, if Trump revisits the aggressive and unorthodox tones seen on this year’s election campaigning, the US Dollar could see itself becoming as Trump-correlated as the Pound is Brexit-related. This would leave the Euro in an increasingly favourable position.
Regardless, at this rate GBP EUR will likely begin to be affected by more routine domestic news again within a week, as market focus on the election dies down.
At the time of writing, the Pound Sterling Euro exchange rate trended in the region of 1.12, while the Euro Pound Sterling exchange rate traded at around 0.89.