Pound Sterling to Euro (GBP/EUR) Exchange Rate Levels Out as Tsipras Calls Elections, Resigns
The Pound Sterling to Euro (GBP/EUR) exchange rate has improved since yesterday, with the Pound now trending in a narrow range against the common currency.
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Drop in Eurozone Confidence Later on May not Dent Single Currency’s Stability
The Pound Sterling (GBP) has trended narrowly against the Euro (GBP/EUR) today as events in Greece once again take the centre stage. Although Greece secured its third bailout on Wednesday, the country’s parliament is anything but secure. Former Prime Minister Alexis Tsipras resigned yesterday as part of a new general election process; the vote for this is predicted to take place on September 20th. In addition to running the gauntlet of another public vote, Tsipras is expected to face a possible vote of no confidence, as many Greek MPs have objected strongly to his virtual reversal of all of the policies he was elected for. In the latest development this morning, over twenty members of Tsipras’ Syriza party have broken away and formed the Popular Unity party, in direct opposition to Tsipras’ leadership.
Despite this turmoil, the Euro (EUR) has fared better than expected, and if the Eurozone Consumer Confidence score for August comes in with a strong positive, the Euro can be expected to regain some of the overall gains that it made yesterday.
The Pound Sterling to Euro (GBP/EUR) exchange rate dived today after the Greek bailout was formally approved last night, securing Greece’s place in the Eurozone for the time being.
GBP/EUR Exchange Rate Crumples as UK Retail Sales Figures fail to Inspire
The Pound Sterling (GBP) dived to -0.8% against the Euro (GBP/EUR) today as the UK monthly and yearly Retail Sales results for July either met with or fell below forecasts.
The Pound has had a mixed performance elsewhere, posting significant rises and falls in equal measure. Among the Pound’s losses today were a -0.8% drop against the Czech Koruna (GBP/CZK) and the Danish Krone (GBP/DKK) and a worse decline of -1% against the Romanian New Leu (GBP/RON). Sterling’s gains included a rise of over 0.6% against the Mexican Peso (GBP/MXN), the Russian Ruble (GBP/RUB) and the Indian Rupee (GBP/INR).
Euro (EUR) Gathers Steam but Powers towards a Stormy Future
The Euro (EUR) has performed far more consistently than the Pound (GBP) today, rising across the board since this morning. This comes after the Greek bailout package was finally approved last night by the European Stability Mechanism (ESM). The ESM almost immediately funded the Greek government €13bn, which the Hellenic parliament promptly used to pay off its most immediate loan of around €3.5bn owed to the European Central Bank (ECB) today.
Although Greece’s place in the Eurozone is currently unquestioned, the person who will be running the country is somewhat less clear. Prime Minister Alexis Tsipras announced today that he would be holding snap elections, with estimates placing the date on September 20th. Under the code of Greek law, Tsipras must resign until the elections take place, with a caretaker government running the country in the meantime. Speculation places the current President of Greece’s Supreme Court, Vassiliki Tanou-Christophilou, as the ‘acting Prime Minister’ after Tsipras presumably resigns. Tsipras is not guaranteed a return to power, as dissention and rebellion has been rife among his own Syriza party over the decision to keep Greece in austerity for potentially decades to come.
In spite of future turbulence, the Euro has risen by over 0.7% against the US Dollar (EUR/USD), the Pound Sterling (EUR/GBP), the South African Rand (EUR/ZAR) and the Australian Dollar (EUR/AUD). The common currency’s greatest gain has been of 1.4% against the Indian Rupee (EUR/INR).
GBP/EUR may Rise again if UK Debt shows Signs of Decreasing
Although today has been a bad one for the Pound (GBP), it remains a possibility that Sterling can still rise tomorrow if the UK Public Sector Net Borrowing and Public Finances results for July print significant reductions. An unexpected drop in German and Eurozone Consumer Confidence figures will also help the Pound in its endeavour to reclaim lost ground against the hawkish single currency (GBP/EUR).
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4005 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7142 today.