Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Dive on SNB
The Euro to Pound Sterling (EUR/GBP) exchange rate dived by around -1.02% on Thursday. This is as a result of the Swiss National Bank introducing negative interest rates in order to protect the currency’s cap. The Pound, meanwhile, surged against the majority of its most traded rivals after Novembers’ retail sales impressed.
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The Euro to Pound Sterling exchange rate is currently trending in the region of 0.7845.
Euro (EUR) Exchange Rate Stumbles on SNB
In the aftermath of the decision by the Swiss National Bank to introduce a negative interest rate in order to protect the assets cap and safe-haven status, the common currency slumped against nearly all of its major peers.
However, the attempt to soften the exchange rate is facing some outside problems as Alvin T. Tan, a foreign-exchange strategist at Societe Generale SA in London, states; ‘The other thing undermining the attempts to weaken the Swiss Franc is the ongoing Russian crisis and emerging-market selloff — the Franc remains a safe haven, […] It’s going to be a very tough environment for the SNB to push Euro-Swiss up significantly.’
The Euro to Pound Sterling exchange rate softened to a low today of 0.7834.
Sterling (GBP) Exchange Rate Rallies on retail Sales
A surge in seasonal spending has seen November’s British retail sales increase significantly. On a yearly basis, Retail Sales eclipsed the median market forecast of a drop from 4.9% to 4.5%, but the actual result advanced to 6.9%.
‘These numbers verify the shift in spending patterns happening in the final quarter of the year. Black Friday led to unprecedented demand,’ said Natalie Berg from Planet Retail. ‘What we don’t know is to what extent did this simply bring spending forward,’ she continued. ‘I suspect it slowed in the first couple of weeks in December.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Trend Lower
With an absence of data to curb the trend, the Euro to Pound exchange rate is likely to continue softening on Thursday. With that being said, early on Friday morning British consumer confidence data has the potential to initiate volatility.,
The Euro to Pound Sterling exchange rate has advanced to a high today of 0.7922.