The Euro (EUR) has fallen by -0.4% against the Pound Sterling (EUR/GBP) today, but could stand to fall much further after midday today.
ECB Decision Unlikely to Rally Common Currency in Near-Future
The value of the Euro (EUR) for the rest of today, and potentially tomorrow, is to be decided shortly when the European Central Bank (ECB) makes its December Policy Review and somewhat inevitably unveils more economic stimulus measures such as an extension of quantitative easing (QE).
The Euro (EUR) has risen by 0.2% against the Pound Sterling (EUR/GBP) today, although the single currency is unlikely to retain this lead in the near-future given today’s falling Eurozone Inflation Rate results for November.
ECB Policy Review due Tomorrow, along with UK PMI Releases
The Euro (EUR) is likely to be negatively affected tomorrow by the European Central Bank (ECB) December Policy Review, which seems sure at this stage to result in an extension of the ECB’s quantitative easing (QE) scheme.
The Euro to Pound Sterling (EUR/GBP) exchange rate has dived today, primarily due to the result of the Eurozone Inflation figures.
EUR/GBP Exchange Rate News: Chain of Misfortunes for Single Currency seem to Guarantee Further QE Tomorrow
The Euro (EUR) has crashed across the board today, with the greatest losses being made up of –0.4% against the Swiss Franc (EUR/CHF) and the US Dollar (EUR/USD), -0.5% against the Australian Dollar (EUR/AUD) and -1.1% against the South African Rand (EUR/ZAR). Against the Pound Sterling (EUR/GBP), the Euro has declined by a small amount.
The main reason for this spectacular downfall has been this morning’s annual Eurozone CPI results for November. The Core figure has dropped from 1.1% to 0.9%, while the non-core figure has failed to match forecasts by remaining at 0.1% instead of rising to 0.2%. This data has been detrimental for the Euro because according to many economists, it ensures that the European Central Bank (ECB) will be rolling out further quantitative easing (QE) and similar measures to counteract the supposed slump in the currency bloc.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Climbs, Overall Sterling Decline Seen Today
The Pound Sterling (GBP) has risen by 0.2% against the Euro (GBP/EUR) and the Danish Krone (GBP/DKK) today, although elsewhere the Pound has been underperforming against its economic rivals. This has equated to -0.3% against the Australian Dollar (GBP/AUD), -0.6% against the Turkish Lira (GBP/TRY), -0.8% against the Russian Ruble (GBP/RUB) and -1% against the South African Rand (GBP/ZAR).
The day’s UK data has not supported the Pound, with the Construction PMI for November falling from 58.8 to 55.3 instead of only hitting 58.5. Yesterday, the Pound’s main source of support came from Bank of England stress test results.
EUR/GBP Exchange Rate Forecast: Crucial ECB Announcement Tomorrow, UK Services PMI Due
The Euro (EUR) is likely to experience major movement tomorrow when the ECB holds its December review, along with announcing the ECB’s Interest Rate Decision and its Deposit Facility Rate. At the time of writing, forecasts were for no change at 0.05% for the interest rate but a negative increase of the Deposit Rate from -0.20% to -0.30%. The big question, however, is whether the ECB will extend its QE policy, and by how much. With the negative effect of today’s Inflation Rate figures hanging over the Eurozone today, however, the expected answers are that the ECB will extend QE, potentially by a great deal.
For the UK, significant movement is also expected to be seen following the publication of the Composite and Services PMIs for November, which have both been forecast to print at 55.
Current EUR, GBP Exchange Rates
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7034 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4219 today.