The Euro (EUR) has advanced by 0.3% against the Pound Sterling (EUR/GBP) today, although the only major Eurozone data has not been supportive to the common currency.
UK Borrowing to Initiate Tomorrow’s Exchange Rate Movement
The Euro’s (EUR) rise today can be attributed to the news yesterday that the European Central Bank (ECB) has raised the lowest required amount for Eurozone banks to hold in capital. The news is naturally of benefit to the Eurozone, as if its banking institutions are required to keep more in their reserves, they will also be more well-equipped to deal with financial crises and bailout circumstances. Today’s Eurozone data, however, has all posted in declining amounts.
The next movement in the EUR/GBP pairing is likely to come from tomorrow’s UK Borrowing figures, which were predicted to show a minor reduction in the amount borrowed at the time of writing.
The Euro (EUR) has declined by -0.5% against the Pound Sterling (EUR/GBP) today, just one of a number of losses caused by today’s poor Eurozone data.
Minor Eurozone Results Tomorrow may Unsettle Sterling ahead of Wednesday’s UK Borrowing Results
The most detrimental factor for the Euro (EUR) today has been its own data – the Eurozone Construction Output figures for August have both posted in the negative, with the annual result seeing a particularly bad printing of -6%.
The next influencer in the pairing will be tomorrow’s German PPIs and Eurozone Current Account results.
The Euro to Pound Sterling (EUR/GBP) exchange rate has declined slightly today prior to the announcement of the day’s only major Eurozone results.
EUR/GBP Exchange Rate News: Little Major Movement as QE Fears Limit Euro’s Progress
The Euro (EUR) has been in a minor downtrend against the Pound Sterling (EUR/GBP) today and elsewhere the single currency has few notable gains or losses. The most notable advances have been by 0.2% against the Polish Zloty (EUR/PLN) and the Canadian Dollar (EUR/CAD), while the greatest loss has been by -0.2% against the South African Rand (EUR/ZAR).
The primary cause for the Euro’s unimpressive movement today has been a lingering concern over this week’s European Central Bank (ECB) Interest Rate Decision and the future possibility of more quantitative easing (QE) for the Eurozone.
According to IHS Chief Economist Howard Archer: ‘It looks most likely that the ECB will hold fire on more QE at Thursday’s policy meeting as a number of Governing Council members appear to be in ‘wait and see’ mood. However, further ECB stimulus as soon as next Thursday certainly cannot be ruled out, particularly given that [Ewald] Nowotny stated last week that it is “quite obvious” to him that new measures are needed to boost Eurozone inflation as even the core rate keeps undershooting’.
Even Performance for Sterling (GBP) Today as Chinese UK State Visit Preparations Finish
The Pound Sterling (GBP) has had an average day so far, rising by healthy amounts against some rivals but falling by equal amounts against others. The former category has included a small uptrend against the Euro (GBP/EUR) and 0.3% against the New Zealand Dollar (GBP/NZD), the Polish Zloty (GBP/PLN) and the Swedish Krona (GBP/SEK). Losses in the latter group have been made up of -0.3% against the Turkish Lira (GBP/TRY) and the Mexican Peso (GBP/MXN) and -0.5% against the Hungarian Forint (GBP/HUF).
With no major UK data to end last week on and only the declining Rightmove House Prices for October to refer to today, investors have instead been forced to rely on the news that a diplomatic and economic state visit from Chinese President Xi Jinping is taking place from Tuesday to Friday. The occasion follows a recent visit to Beijing and surrounding regions by Chancellor George Osborne, who sought to strengthen the UK’s economic ties to the Asian superpower. While Jinping’s visit has been welcomed by economists and investors in the Pound, the trip had been marred before it has begun by the apparent desire of both governments to gloss over the human rights violations present in some of China’s regions in favour of economic solidity.
EUR/GBP Exchange Rate Forecast: Eurozone Construction Figures may Provide Hint over ECB’s Attitude on Interest Rate
The next piece of data due to affect the EUR/GBP exchange rate is the Eurozone Construction Output result for August; while no predictions have been made, the previous results were positive and may be some indicator of how the latest result will come in. Looking further ahead, the biggest Eurozone news of the week is the ECB’s interest rate decision on Thursday, although a number of economists have shared Archer’s opinion that no change from 0.05% will take place. The next UK results will be Wednesday’s Borrowing figures for September.
Current EUR/GBP Exchange Rates
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7341 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3625 today.