The Euro to Pound Sterling (EUR/GBP) exchange rate has dipped today as the current Greek bailout proposal has scraped through parliament and is due for approval by Eurozone finance ministers this afternoon.
Eurozone GDP Data proves Underwhelming for Common Currency’s (EUR) Performance
The Euro (EUR) has fallen by -0.1% against the Pound Sterling (EUR/GBP) today as the Greek bailout negotiations approach a supposed close this afternoon. Earlier today, the most significant data for the Eurozone was released; the German and Eurozone Q2 GDP results. These were broadly positive, although for some nations like Germany, France, Italy and the Netherlands, posted results came in lower than forecast. Finland was the only country in the Eurozone to show a GDP contraction; despite the hardship it faces, Greece’s GDP increased by 0.8%. This all equated to an overall 0.3% rise in Eurozone GDP, which although positive, was 0.1% short of the forecast 0.4%.
The only other major event affecting the Eurozone today is the agreement to the Greek bailout deal, however, as predictions have been mixed for the immediate and long-term impacts on the Greek people and their economy, this signing may not provide the support that the single currency needs.
The Euro to Pound Sterling (EUR/GBP) exchange rate dropped considerably today as recurrent concerns over Greece ended the common currency’s hawkish behaviour.
Euro to Pound Sterling Exchange Rate News: Greek Bailout Uncertainty and Indecisions Send EUR/GBP into Decline
The Euro (EUR) fell by -0.6% against the Pound Sterling (EUR/GBP) today as the uptrend seen since Monday ended with the Euro’s overall softening. This came after fresh concerns were raised over whether the Greek bailout deal would be completed by tomorrow’s proposed deadline and whether the deal would ultimately benefit the Eurozone in the long-term. The latest deadline is for Friday afternoon. Germany has been the strongest doubter of the proposal; on Wednesday, a spokesman for the Federal Ministry of Finance (FoMC) said that the FoMC had ‘formulated questions’ that were part of an ‘examination process, which is not yet finished’. Despite this reluctance to commit, however, the spokesman said that Germany did not reject the bailout.
The Euro has fallen by -0.3% against the Japanese Yen (EUR/JPY) and has dropped by -0.5% against the US Dollar (EUR/USD). In other pairings, the single currency has trended narrowly.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Rises as Pound (GBP) Recovers from UK Job Loss
The Pound Sterling (GBP) has advanced against the Euro (GBP/EUR) by 0.6% today, a sharp reversal of the overall decline that the Pound saw yesterday when a -63K loss in the number of UK Jobs for the three months through June was announced. The Pound has also risen by 0.6% against the Polish Zloty (GBP/PLN), the New Zealand Dollar (GBP/NZD) and the South African Rand (GBP/ZAR). The Pound gained by 0.7% against the Australian Dollar (GBP/AUD), but fell by -0.8% against the Swedish Krona (GBP/SEK).
This indicates a stabilisation of the UK currency; the asset also derived support from the RICS House Price Balance for July showing a rise to 44% today, an improvement over the 42% prediction.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast: Eurozone GDP Data and Successful Greek Conclusion may Reverse Euro’s Current Downtrend
Although circumstances are currently unfavourable, the Euro (EUR) may bounce back against the Pound (EUR/GBP) if the Eurozone Q2 GDP results show signs of major growth in the collective economy tomorrow. As so many European countries are releasing their results in such a short space of time, the overall measure will be the deciding factor; a general decline could act as a weight on Germany’s optimistically forecast results. Other than this, a clean and timely conclusion to the negotiations in Greece is likely to be the biggest affecter of the Euro’s performance.
For the Pound (GBP), the UK monthly and annual Construction Output figures for June are due tomorrow and as both results have forecast growth, this may hold the Pound in its current advantage against the Euro (GBP/EUR).
Current EUR, GBP Exchange Rates
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7111 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4067 today.