Pound to Euro (GBP to EUR) Exchange Rate Firms; UK Anticipates Inflation
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Both currencies are at present trading amongst tense political disagreements as Russia becomes aggressive toward Ukraine, with Russia positioning 45,000 troops on the Ukrainian border.
NATO Secretary General Anders Fogh Rasmussen stated: ‘We see the Russians developing the narrative and the pretext for such an operation under the guise of a humanitarian operation and we see a military buildup that could be used to conduct such illegal military operations in Ukraine.’
This follows after the representative for the Russian Security Council Nikolai Patrushev commented: ‘We are interested in peace in Ukraine and in bringing the sides to the negotiating table so they could settle their disputes. Russia will continue to make every effort for the soonest de-escalation of tensions.’
With such uncertain tensions dominating news globally, the currency market will remain volatile with investors seeking safe haven currencies.
Furthermore with Russia placing embargoes against the importation of goods from the US and EU, the Eurozone is anticipating a severe backlash with the inability to trade their produce with Russia.
An expert in the field Mario Ohoven commented: ‘The slowing impact of increasing sanctions is now having an effect on company order books and threatening business expectations for the year.’
Tuesday will see the release of both German and Eurozone economic confidence figures, which are currently forecast to prove unfavourable.
The German Current Situation Survey which is used as a tool to indicate the near-term trajectory of the German economy is expected to fall unfavourably. The figure is expected to drop to 54.0 in August, following July’s 61.8 statistic.
However, German company MWL Apparate Bau GmbH is stating the Russia disagreements are affecting business transactions greatly.
Representative Reinhard Weber commented: ‘There are two contracts from Russia we didn’t get and we think that’s for political reasons. They’re afraid of sanctions being extended—that they will make an order and that we won’t be able to fulfil it because of political decisions in Germany or Europe.’
Wednesday however will prove influential for the GBP to EUR pairing with the publication of UK Average Weekly Earnings, Claimant Count Rate, Employment Change, Unemployment Rate, Jobless Claims, and Weekly Earnings figures are announced followed by the Bank of England’s Inflation Report. If the Inflation Report proves favourable as hoped, the Pound could rally against other majors in the currency market.
Monday saw the Euro trade against the Pound between the confines of 0.7962 and 0.7996.