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Euro Pound Exchange Rate Trending Tightly as Investors Mull ECB Election Concerns

The Euro Pound exchange rate has trended closely today, with Thursday’s European Central Bank (ECB) minutes acting as a limiting factor on Euro demand so far today.

  • EUR GBP rate steady at 0.87 – GBP EUR trades at 1.14
  • Euro demand tempered by ECB 2017 outlook – Spanish inflation advanced in December
  • Pound recovery seen after Saunders speech – BoE official sees little unemployment change in 2017
  • Eurozone trade balance to shift EUR on Monday – UK inflation and PM’s Brexit speech due Tuesday

The Pound has made fractional gains against the Euro, on the back of a somewhat optimistic forecast by a Bank of England (BoE) official.

EUR GBP Exchange Rate Softening; Rising Spanish Inflation Support Offset by 2017 Political Problems

The Euro has failed to make much headway against the Pound today, owing to Thursday afternoon’s release of the European Central Bank (ECB) minutes.

Covering Wednesday’s meeting, the minutes initially boosted the Euro by showing that policymakers had disagreed about whether to extend bond buying programs.

Since then, however, the Euro has dropped off, as the minutes also revealed that policymakers were concerned about upcoming Eurozone elections this year, which include votes taking place in the Netherlands, France and Germany.

Economic data has been positive today, with finalised Spanish inflation in December being revised up.

Pound Sterling Euro Exchange Rate Appreciates on Improved BoE Jobs Outlook

While it began trading today in a bad way, the Pound has managed to stage a recovery after the day’s only major economic event.

This was a speech from Bank of England (BoE) official Michael Saunders, who was focusing on how UK employment and wages might change in 2017.

Although Saunders saw uninspiring wage growth coming this year, he also estimated that unemployment was not likely to shift much from its current level of 4.8%.

Future EUR GBP Forecast: Eurozone Trade Results and Key UK Brexit Speech due Next Week

Looking ahead to the coming week, the Euro will likely hold dominance over the Pound on Monday, as the first major UK announcements aren’t expected until Tuesday.

Monday morning’s major opening Eurozone data will be the November trade balance, which previously posted a surplus figure of 20.1bn. On Tuesday morning, ZEW economic sentiment indexes for January are due for Germany and the overall Eurozone.

Tuesday’s UK releases will start with December’s inflation rate results; if overall forecasts for 2017 are to be believed, then both the monthly and annual figures are likely to rise prodigiously.

The other important UK news on Tuesday will be a scheduled speech by Prime Minister Theresa May.

Having faced harsh criticism over her vagueness when discussing the Government’s official line on Brexit, May will ideally clarify the situation and reduce the still-stifling levels of uncertainty that have weakened the Pound so notably.

Current Interbank Euro Pound Exchange Rates

At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.87 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.14 today.