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Can the Euro Pound Exchange Rate Recover Losses?

The Euro Pound exchange rate dipped today, with the Greek debt crisis remaining a strong limiting factor on the Euro.

  • EUR GBP rate trends at 0.85 – Pound Euro trades at 1.17
  • Euro demand drops as Greek debt crisis drags on – Italian industrial figure doubles in December
  • Pound supported by falling trade deficit – Manufacturing figures exceed forecasts
  • Portuguese inflation and German elections due in near-term – UK GDP estimate due this afternoon

The UK’s morning data has largely boosted demand for the Pound, due to unexpected gains being seen for manufacturing production figures among others.

EUR GBP Exchange Rate Worsens as Greek Debt Crisis Approaches Crucial Deadline

The Euro has fallen against the Pound by a small amount today, following gloomy outlooks for Greek debt talks.

Speaking frankly, Piraeus University Economics Professor Platon Tinios stated that;

‘We know the [Greek] government will not have enough money to pay its bills by July’.

This outlook has done little to help the situation, as if no balance is reached between the debt-riddled Greek government and its creditors by February 20th, then an incoming series of major elections could push the alarming issue to the sidelines.

While domestic data has not enabled a EUR GBP rally, the fact that Italian industrial production in December has risen from 3.3% to 6.6% can only be considered as positive.

Pound Euro Advance Seen as UK Production Figures Beat Forecasts

Having been greatly unsettled by Article 50 developments earlier in the week, the Pound has had a last hurrah today and climbed against the Euro by 0.2%.

This comes after a spate of UK ecostats, which have seen the trade deficit reduced from -3.56bn to -3.3.bn and manufacturing production climb on the month and the year in December.

The December industrial production figure has been more mixed, with an annual rise coming alongside a monthly slowdown. For yearly construction output in December, a slowing from 1.8% to 0.6% has been seen.

Future EUR GBP Forecast: GDP Forecast for January Ahead

The last Eurozone data of the week will consist of this morning’s Portuguese inflation rate figures for January, while following this on Sunday will be Germany’s 2017 Presidential Election.

Previous inflation figures for Portugal were positive, while Social Democratic Party candidate Frank-Walter Steinmeier is largely forecast to become President by a landslide majority. The German President, however, largely has a symbolic role, when compared to nations like France.

The last significant UK announcement of the week will be this afternoon’s National Institute of Economic and Social Research (NIESR) GDP estimate for the three months to the end of January, which was previously estimated at 0.5%.

Looking ahead to next week, the first Eurozone news will be Monday’s Irish inflation figures for January, while the first UK release will be Tuesday morning’s inflation rate figures for the same month.

Current Interbank Exchange Rates

At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.85 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.17 today.