Germany suggested it would decline any request from Greece to extend its austerity programme.
Earlier… The Euro to British Pound (EUR/GBP) exchange rate advanced early in Thursday’s European session after a bullish day for the British currency on Wednesday.
The British Pound to Euro (GBP/EUR) rocketed during Wednesday’s session after favourable UK employment data emerged. Jobless Claims Change recorded -38.6K in January after December’s positively revised -35.8K. Economists had forecast a smaller -25.0K change in jobseekers.
In addition, Average Weekly Earnings rose to 2.1% from 1.8% in the three months through December on the year. Employment Change jumped to 103K in the final three months of the year allowing the Unemployment Rate to slip from 5.8% to 5.7%.
However, the British Pound is trading with a dark cloud above it as the UK election draws closer, an event threatening to push the currency off balance. In the run up to May, political parties are likely to become more aggressive in their campaigns as they vie for votes and therefore the British Pound exchange rate is forecast to weaken.
In addition, the uncertainty surrounding the election is likely to see the Bank of England (BoE) remain dovish on the prospect of interest rate hikes, despite Wednesday’s favourable labour market data.
Industry expert John Stopford commented: ‘The currency is potentially going to be more influenced by uncertainty coming from the election than gilts. The election result is unlikely to have an immediate impact on the interest rate outlook that the UK bond market is very much dependent on.’
Euro to British Pound (EUR/GBP) Exchange Rate Forecast
The British Pound to Euro (GBP/EUR) exchange rate could fluctuate on Thursday as a result of ongoing Greek negotiations and Eurozone Consumer Confidence figures out later in the session.
Greece has now officially asked for a six-month bailout extension while talks regarding the nation’s austerity deal continue. However, the request from Greece has sparked an emergency meeting of the Eurozone’s finance ministers on Friday.
ECB to Release January Meeting Minutes Which Introduce QE
However, the European Central Bank (ECB) is scheduled to release its first ever minutes on Thursday in an attempt to increase transparency into the institution’s inner workings. The report will cover the January 22nd meeting which saw the ECB begin a programme of quantitative easing (QE).
Economist Marco Valli stated: ‘With the publication of accounts, people will have their dissent in the record. Disagreement is natural when you have 25 people sitting around a table trying to find a sensible monetary policy response to the current macro picture.’
Friday could be an interesting day for the British Pound to Euro (GBP/EUR) exchange rate with UK Retail Sales figures published, as well as Markit’s German and Eurozone Manufacturing, Composite and Services Purchasing Managers Index (PMI).
The Euro to British Pound (EUR/GBP) exchange rate is trading at 0.7378. The British Pound to Euro (GBP/EUR) exchange rate is trending in the region of 1.3559.