Euro to Pound Sterling exchange rate declines as traders ponder Sundays outcome from the 130 Eurozone bank examination conducted by the European Central Bank. The Euro has generally softened against the majority of its most traded currency competitors. The US Dollar is struggling against negative sentiment after a New York doctor got infected with the Ebola virus. Sterling, meanwhile, has curbed its bearish run after growth data fell in line with forecasts.
The Euro to Pound Sterling exchange rate is currently trending in the region of 0.7882.
The Euro to US Dollar exchange rate is currently trending in the region of 1.2652.
On Friday the Euro has slumped against the majority of its rivals amid trader anxieties regarding the ECB examination of Eurozone banks. The comprehensive assessment of 130 banks was launched last year with the final results due for publication on Sunday. Philippe Bodereau, global head of financial research at Pimco, has estimated that around 18 banks will fail the ECB’s stress test.
Bodereau went on to state; ‘If it is a narrow margin on something that could go either way, I think it will be in the ECB’s instinct to tweak it more towards the interest of the banks […] as a bond investor, the ideal scenario for me is if there are lots of failures and that forces big equity raisings. But I don’t think that will happen.’
Analysts at Berenberg, however, argue that any rally in European bank stocks will be short-lived, stating; ‘There is evidence that the ECB has compromised to meet political, bank and market expectations. Thus, the real issues remain unaddressed.’
The Euro to Pound Sterling exchange rate has hit a low today of 0.7871.
The Euro to US Dollar exchange rate has fallen to a low today of 1.2632.
Friday has seen the Pound advance against the single currency after UK growth figures met with the market consensus. Quarterly third-quarter Gross Domestic Product was forecast at 0.7% growth having shown second-quarter growth of 0.9%, and the actual result met with predictions. Similarly, the year-on-year GDP showed third quarter growth of 3.0%, which was in line with the median market forecast.
Despite the British data meeting with expectations, the GDP is still down on both a yearly and a monthly basis which could hurt Sterling in the long run.
As traders await the US data due for publication on Friday afternoon, the US Dollar has depreciated under renewed anxieties regarding the Ebola virus. A New York doctor, Craig Spencer, has been diagnosed with the virus and is currently quarantined in a Manhattan hospital.
Euro Exchange Rate Forecast to Slump against Pound and US Dollar
Despite British growth figures having cooled and US sentiment waning amid Ebola tensions, the Euro is likely to continue slumping. This can be attributed to very negative sentiment towards the single currency and the ECB. Should the ECB stress test result in several banks failing, the ECB may have to intervene with yet more stimulus measures to counteract the issues.