Pound to Euro (GBP/EUR) Exchange Rate Trends Higher after Dovish Draghi Comments
Following a soft week the Pound Sterling has notched up slight gains versus the majority of its major peers. The Pound Sterling to Euro exchange rate is particularly strong after the European Central Bank President Mario Draghi delivered a very dovish statement at Friday’s Jackson Hole Symposium.
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The Pound Sterling to Euro exchange rate is currently trending in the region of 1.2556.
Last week’s British domestic data was generally below par; with particular reference to retail sales data which caused the Pound to file losses across the board. The Pounds softness was further extended with a string of negative Eurozone data which saw traders pull away from Sterling.
The majority of European domestic data results were less-than-desirable last week and the single currency weakened against nearly every currency other than Sterling. Friday saw the Euro hold steady ahead of the important speech given by European Central Bank President Marion Draghi.
The single currency plummeted to an 11-month low following the Jackson Hole symposium in which Draghi outlined his intention to keep the Euro weaker to stimulate the faltering European economy.
The Euro felt further declination yesterday after German domestic data fell well below expectations. The German Business Climate Index for industry and trade was forecast to drop fractionally from the previous figure of 108.0 to 107.0, but the actual result fell to 106.3. President of the IFO Institute Hans-Werner Sinn commented; ‘The firms were again less satisfied with their current business situation. Also with regard to the further course of business, they are more sceptical than in the previous month. The German economy continues to lose steam’.
German IFO Current Assessment fell below the forecast figure of 112.0 hitting 111.1, and the IFO Expectations showed unwanted declination from 103.4 to 101.7.
The Pound Sterling to Euro exchange rate hit a high today of 1.2567.
Today there has been only one UK domestic data release; which is not of huge significance in terms of market movement. The BBA Loans for House Purchase was forecast to hit 44065 but the actual data showed to be 42792.
There have been no European data releases today so the Euro has continued on its downward trend in the absence of any important market moving information.
Forecast for the Pound Sterling to Euro Exchange Rate
With very little by way of domestic data pertaining to the UK, the majority of Sterling movement is likely to be dictated by other currencies. Friday’s Consumer Confidence Survey and Nationwide House PX data will be the most significant for those invested in the Pound.
In terms of European data tomorrow will be of high importance with the release of yet more German domestic data. Those invested in the Euro will be hoping that the German Import Price Index and Consumer Confidence Survey will at least match forecast figures to give any hope of the Euro clawing back its extended losses.
The Pound Sterling to Euro exchange rate hit a low today of 1.2546.