Homepage » News » EUR/GBP » Euro to Pound (EUR/GBP) & Euro to US Dollar (EUR/USD) Exchange Rates Softer as Belgium Strikes and Greece Fears Rise

Euro to Pound (EUR/GBP) & Euro to US Dollar (EUR/USD) Exchange Rates Softer as Belgium Strikes and Greece Fears Rise

Euro, Greece, Athens, Protests

The Euro to Pound (EUR/GBP) exchange rate strengthened as Monday’s session advanced as poor  house price data weighed upon Sterling ahead of Tuesday’s UK inflation report.

The Euro to US Dollar (EUR/USD) exchange rate meanwhile weakened as US data showed that manufacturing output in the worlds largest economy made its biggest increase in nine months.

Factory production increased 1.1 % last month after an upwardly revised 0.4 % advance in October, the Federal Reserve said on Monday. Following the positive data economists raised their bets that the Federal Reserve is edging closer to raising interest rates.

Earlier in the session the Euro to Pound (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates softened on Monday as the biggest strike in years brought Belgium to a standstill and as worries over political uncertainty in Greece weighed upon the single currency.

Belgium Grinds To A Halt

Belgium ground to a halt as the nation’s trade unions caused the grounding of many flights, the cutting of international rail links and the closure of seaports. The unions are protesting against the government’s austerity plans. The protests are just the latest civil unrest seen across Europe in recent months.

Earlier in the year, there were protests in, Spain, Greece and other European Union nations as austerity measures do little to improve employment or economic growth across the continent.

Belgian trade unions launched their movement last month with a march of more than 100,000 people in Brussels, which ended in violent protests that left dozens of police officers injured.

The Belgian protests come just a day after mass protests took place in Italy as Italians marched against Prime Minister Matteo Renzi’s reform plans.

Greece Fears Build

Also putting pressure on the Euro are ongoing concerns over the political instability currently afflicting Greece. Economists are concerned that the instability could result in snap elections, which could lead to victory for the left wing Syriza party.

If such an event occurs, the group’s policies could lead to the European doomsday scenario of the nation leaving the Eurozone and set off a chain reaction, which could cause the entire currency bloc to fall and perhaps the wider European Union along with it.

For the worse case scenario to occur however, the Greek parliament must fail to elect a new president. If it fails three times to get its preferred candidate the job then snap general elections would have to be called. A president needs the support of 60% of the members of parliament, now the government can only muster 50%.

Euro (EUR) Exchange Rate Forecast

With no market moving Eurozone data due for release the Euro is at the mercy of geopolitical events. Concerns over commodity prices and a slowing global economy are weighing, as is increasing speculation that the European Central Bank will begin a quantitative easing programme in the first quarter of next year.

‘There is no doubt that the ECB will scale up its expansionary policies, it’s just a matter of timing. The ECB will remain under huge pressure to protect its credibility and fulfil its price-stability mandate,’ said Duncan de Vries, an economist from NICB Bank NV.

The single currency could regain some ground on Tuesday if the latest German and Eurozone PMI data comes in positively. Also due are the latest Eurozone and German ZEW Economic Sentiment Index reports.

Euro Exchange Rates:

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.2416 ,
Euro,,British Pound,0.7958 ,
Euro,,Australian Dollar,1.5116 ,
Euro,,Canadian Dollar,1.4431 ,

As of 16:15 pm GMT