Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: Euro Softened after Greek Bailout Payment Hits Snag
Pound Currency News: GBP Strengthens Today despite BRC Like-for-Like Sales Slump
With Eurozone finance ministers having failed to approve the latest tranche of bailout funds for Greece yesterday, in spite of all parties expressing optimism that a deal will soon be reached, the Euro (EUR) has remained in relatively muted spirits on Tuesday morning. Although the British Retail Consortium (BRC) Like-for-Like Sales fell particularly sharply, from 2.6% to -0.2% in October, this failed to particularly diminish the appeal of the Pound (GBP). Consequently the GBP/EUR exchange rate was trending in the range of 1.4059 this morning.
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Despite a healthy German trade surplus the GBP/EUR exchange rate has been on an uptrend today as a delay to the next release of bailout funds to Greece has dented the Euro.
US Payrolls Better Forecasts, Increase Odds of 2015 Fed Rate Hike & Shore up GBP/EUR Conversion Rate
The Pound (GBP) was weighed down last week by the unexpectedly dovish tone that marked the latest Bank of England (BoE) policy meeting, with the central bank’s Inflation Report having highlighted the expectation that domestic inflation would not rise to the 2% target before the third quarter of 2017. Sterling continued to trend bearishly on Friday morning, with the Pound Sterling to Euro (GBP/EUR) exchange rate failing to benefit from a sharper-than-expected weakening in German Industrial Production.
Nevertheless, the GBP/EUR pairing was bolstered by the publication of the afternoon’s US Change in Non-Farm Payrolls, which showed a larger level of job creation within the US economy than forecast. Due to the strong negative correlation between the Euro (EUR) and US Dollar (USD) this saw the common currency slump sharply across the board, as the odds of a December interest rate rise from the Federal Open Market Committee (FOMC) jumped. However, as sentiment towards the Pound remained relatively weak it was not long before the GBP/EUR exchange rate resumed a downward trend.
Widened German Trade Surplus Failed to Bolster Euro (EUR) as Greek Bailout Funds Delayed
Monday proved a little more mixed for the single currency, although the outlook of the Euro was boosted by the revelation that Germany’s September trade surplus had widened further than anticipated from 15.4 billion Euros to 22.9 billion. Suggesting that the initial impact of the Volkswagen emissions scandal was not as severe as might have been feared, this result helped to shore up faith in the robustness of the Eurozone’s powerhouse economy.
However, the confidence of pundits was dealt a blow by the news that Greece would likely not be receiving its latest 2 billion Euro tranche of bailout funds on schedule. With Prime Minister Alexis Tsipras at odds with creditors over the value of houses covered by the country’s foreclosure laws the sustainability of the current agreement has been brought somewhat into question. As Eurozone finance ministers meet this afternoon to discuss the matter, though, there does seem to be some confidence that this hurdle will not hamper the situation for long.
GBP/EUR Exchange Rate Forecast: Pound Predicted to Uptrend with Improved UK Weekly Earnings
A stronger rally could be in store for the Pound on Wednesday with the release of a raft of UK employment data, particularly as both the Average Weekly Earnings and Jobless Claims Change figures are expected to show improvement on the month. Strong showings here would likely help to improve the chances of the BoE making a nearer-term interest rate move, particularly after the Organisation for Economic Co-operation and Development (OCED) recently advised that the UK would benefit if interest rates were raised in early 2016.
Eurozone data will be thin on the ground in the coming days, with the continuing developments of the current Greek debt situation likely to be the primary cause of volatility for the common currency.
Current GBP, EUR Exchange Rates
At time of writing, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending positively in the region of 1.4044, while the Euro to Pound Sterling (EUR/GBP) pairing slumped in the range of 0.7121.