Euro to Pound (EUR/GBP) Exchange Rate Weaker; Eurozone Damaged by Sanctions
The Euro (EUR) to Pound (GBP) exchange rate is presently residing at 0.7979 in the currency market. This session has seen the Single Currency attain highs of 0.7996 versus lows of 0.7962 against Sterling.
If you're looking to make an international money transfer, we recommend TorFX.
Both currencies are presently trading within the effect of Russia’s latest import bans which will affect the economies.
The UK has felt immediate effects from Russia’s embargoes on agricultural import trading with produce left unable to be transported to its originally scheduled country, following the EU and US sanctions against Russia in an attempt to impair their economy.
The Pound however has gained in anticipation of the highly influential Inflation Report published on Wednesday this week.
Expert in the field Michael Sneyd commented: ‘In terms of key events this week, it would be the Inflation Report.’
With much speculation veiling the UK economy regarding the Bank of England’s (BoE) decision to raise interest rates, there is debate regarding the amount of slack in the UK economy. Economist Peter Dixon stated: ‘The degree of labour-market slack evident from wage data suggests that there is no immediate rush to move rates higher.’
The Pound’s exchange rate will be influenced by Average Weekly Earnings, Claimant Count Rate, Employment change, Unemployment Rate, Jobless Claims Change, and Weekly Earnings figures all set to be published on Wednesday.
Tuesday however will see the release of German and Eurozone Economic Sentiment figures which are expected to shrink. German Economic Sentiment in August is expected to fall to 17.0, from July’s 27.1. Furthermore, The German Current Situation Survey is forecast to fall to 54.0 in August from the 61.8 in July.
The EU however, should expect to be greatly affected by the current sanctions whilst the Eurozone recovery is fragile. Greek representatives for the European Parliament commented: ‘Thousands of small- and middle- sized Greek farms producing fruit and vegetables and selling them primarily to the Russian market have been hit hard now as their unsold products are now rotting at warehouses.’
With fear that the sanctions may create severe backlash for the EU, some representatives are becoming vocal.
Austrian political representatives stated: ‘In just a few days after the [Russian] sanctions came into force they hurt our agriculture. The EU is thinking on how to mitigate it. Instead of putting Russia on its knees, they drag our farmers to ruin with their senseless sanctions policy.’
In the near future the Pound appears to be in a stronger position in the currency market than the flailing Euro, as geopolitical tensions escalate and the Eurozone feels the effects of the sanctions imposed against Russia.
The GBP to EUR exchange rate is currently residing at 1.2537.