Pound Sterling to Euro (GBP/EUR) Exchange Rate Trending narrowly as UK CPI Results are Imminent
The Pound Sterling to Euro (GBP/EUR) exchange rate has not advanced today, as the Pound has slipped into a lull before the announcement of the monthly and yearly UK CPI for July.
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GBP/EUR Stands to Skyrocket if UK Inflation Shows Increase
The Pound Sterling (GBP) has levelled out against many of its competitors today, and is now trending in a narrow range across the board. This comes before the release of the UK inflation data for July. Although the annual forecast is for stagnation (0.0%), even the slightest increase in this figure would likely benefit the Pound tremendously. This is due to a recent article by Bank of England (BoE) Monetary Policy Committee (MPC) member Kristin Forbes, which inexorably linked a rise in UK inflation with an increased likelihood of a UK interest rate hike.
The Pound Sterling to Euro (GBP/EUR) exchange rate has levelled out today after more doubt was cast on the possibility of future debt relief for Greece.
Finland’s Soini Calls Greece a problem to last ‘Decades’, Euro flops overall
Despite supporting the Greek bailout last week, Finnish Foreign Minister Timo Soini has blasted the longevity of the situation, saying ‘Unfortunately, this problem [Greece] will be in front of us for decades, I would say, if the Eurozone stays together.’
Soini was also heavily critical of potentially using debt relief to aid Greece’s economic recovery, stating that ‘An absolute debt cut, I think, is out of question, Germany too is against it’. The future of Greece in the Eurozone will likely dominate debates for weeks to come, although Greek Prime Minister Alexis Tsipras may not be part of it if his apparently impending Confidence Vote backfires.
Despite securing a third bailout for Greece, Tsipras has become vilified by some members of his party, who feel he has betrayed the Greek people and his party by signing the country up to further austerity and budget cuts. To quote Soini, ‘In politics, one must make unpleasant decisions’.
The Pound Sterling to Euro (GBP/EUR) exchange rate has risen today after an article published by Bank of England (BoE) Monetary Policy Committee (MPC) member Kristin Forbes urged that the UK interest rate should be raised before UK inflation levels reach 2%.
GBP/EUR Exchange Rate Trending Narrowly, Larger Gains elsewhere for Sterling
The Pound Sterling to Euro exchange rate (GBP/EUR) has trended in a narrow range against the today, but the British currency has risen by a considerably larger amount elsewhere. The Pound’s gains include a rise of 0.7% against the Israeli New Shekel (GBP/ILS), the South African Rand (GBP/ZAR) and the Turkish Lira (GBP/TRY). The Pound’s greatest advance today has been of 1.4% against the Russian Ruble (GBP/RUB).
Forbes’ article has been instrumental towards these gains today, as it effectively linked any moves in the UK inflation rate towards 2% with an increasing likelihood of a UK interest rate increase by the BoE. Forbes wrote against the forecast predictions that the inflation rate will hover around the zero mark for months by stating ‘Enjoy the sunshine and low inflation this holiday season, but remember that neither are likely to persist. Stay vigilant against sunburn. I and my colleagues on the MPC will also remain vigilant to changes in the economy.’
EUR to GBP (EUR/GBP) Exchange Rate Declines as German Concerns Undermine Bailout
The Euro has declined marginally against the Pound Sterling (EUR/GBP) today and has had a decidedly varied set of gains and losses against other currencies. The common currency has risen by over 0.4% against the Australian Dollar (EUR/AUD), the Canadian Dollar (EUR/CAD) and the South African Rand (EUR/ZAR) today, but has fallen by -0.2% against the Polish Zloty (EUR/PLN) and by -0.3% against the New Zealand Dollar (EUR/NZD).
This comes as the Greek bailout deal approaches its last trial this week – approval by the various parliaments of Europe. The proposal was approved by both the Greek parliament and Eurozone finance ministers last week, but a number of objections by German MPs throughout proceedings have marred this positive measure. German Chancellor Angela Merkel urged German officials to approve the deal, reversing her previous opposition to possible Greek debt relief at the same time.
Pound to Euro Exchange Rate Forecast: Unanimous Approval Could Uptrend EUR/GBP
The Euro (EUR) faces a tumultuous week – a quick and clean approval to the third Greek bailout could send the Common Currency soaring against its rivals, but any further delays may bring old doubts about the viability of the bailout to the surface.
The UK CPI Indices for July are due out tomorrow, and any signs of inflation increasing towards 2% will turn the Pound (GBP) bullish due to optimism about an impending rate hike.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4077 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7106 today.