The Euro to Pound Sterling (EUR/GBP) exchange rate firmed on Friday as the single currency found support from easing concerns over the Greek situation and as the UK currency was weighed upon by comments made by a Bank of England (BoE) policy maker.
The Euro to Pound Sterling (EUR/GBP) exchange rate firmed to a session high of 0.7266
Crisis talks between Greek Prime Minister Alexis Tsipras and senior European Union leaders such as German Chancellor Angela Merkel resulted in increased optimism that a deal will be reached.
The meeting which dragged on until late in the night, involved Tsipras, Merkel, summit chairman Donald Tusk, European Commission President Jean-Claude Juncker, the chair of the Eurogroup of finance ministers Jeroen Dijsselbloem, European Central Bank (ECB) President Mario Draghi and French President Francois Hollande. Juncker, Tusk and Dijsselbloem issued a joint statement at the conclusion of the meeting.
“We fully adhere to the agreement of the Eurogroup of Feb. 20. In the spirit of mutual trust, we are all committed to speed up the work and conclude it as fast as possible,” it said. “The Greek authorities will have the ownership of the reforms and will present a full list of specific reforms in the next days.”
Greece is rapidly running out of funds and could default by the end of March if no bailout funds are issued. Tsipras assured EU leaders and Greece’s creditors that new economic reforms would be presented soon
‘What was discussed was that once the reforms are submitted, and in a detailed manner, to the Eurogroup when that happens…then the funding will be unlocked towards the Greek economy. Athens intends to progress quickly with implementing such proposals,’ said Greek government representative Gabriel Sakellaridis.
The Euro also received support from data released by the ECB, which showed that the Eurozone’s current account surplus increased in the first month of the year. The current account, which measures the economy’s investment and trade flows, came in at €29.4 billion an increase of €8.2 billion. The current account surplus is now 2.4% of GDP, up from the preceding year’s number of 2%.
BoE Comments Weigh on Pound Sterling Exchange Rate
The Pound Sterling meanwhile, remained under pressure from comments made by BoE policy maker Andy Haldane who said that an interest rate cut is now just as likely as an interest rate rise.