Euro to Pound Sterling (EUR/GBP) Exchange Rate News – Greek Election in Focus this Week
Although the Eurozone’s Composite PMI hit a five-month high in January, and indexes for Germany and France exceeded expectations, the Euro remained trading in the region of a 7-year low against the Pound and an 11-year low against the US Dollar.
With the recent Swiss National Bank (SNB) policy adjustment and the European Central Bank’s quantitative easing scheme causing extreme upheaval in the currency market, the Euro has been the victim of extreme volatility – and further fluctuations could be on the way.
On Sunday the Greek populace will decide on their next leader, and the result of the election could have far reaching consequences.
According to strategist Eric Viloria; ‘Greek elections do add some uncertainty and weigh on the currency somewhat, but the more relevant and important thing is the economic and monetary policy trends in the Eurozone. They’re likely to maintain an easy policy stance for quite some time.’
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trading in the region of 0.7508, down 0.7% on the day’s opening levels.
The Euro to US Dollar (EUR/USD) exchange rate is trading in the region of 1.1286, down 0.5% on the day.
EUR/GBP Exchange Rate – Further Losses Likely?
The Euro to Pound Sterling (EUR/GBP) exchange rate tumbled on Thursday as the European Central Bank (ECB) bit the bullet and rolled out a quantitative easing programme.
As the programme was more extensive than anticipated the Euro fell across the board.
The upcoming Greek election also wore heavily on the common currency.
Today’s manufacturing reports for the Eurozone and its largest economies could cause further EUR/GBP movement.
EUR/GBP Exchange Rate News: ECB Holds Rate Today, Announces QE
Before European Central Bank (ECB) President Mario Draghi concluded his press conference, the Euro to Pound Sterling (EUR/GBP) exchange rate fell to a fresh 7-year low.
Although the central bank left interest rates unchanged, it went on to outline an asset purchasing programme worth 60 billion Euros a month.
The duration of the plan means that the stimulus amounts to over 1 trillion Euros.
Although Germany are unlikely to be backing the development, Draghi said of the decision; ‘While the sharp fall in oil prices over recent months remains the dominant factor driving current headline inflation, the potential for second-round effects on wage and price-setting has increased and could adversely affect medium-term price developments.’
While the EUR/GBP pairing is likely to experience further volatility over the next couple of hours, the Euro to Pound exchange rate hit a low of 0.7600 and is currently trading in the region of 0.7618
EUR/GBP Exchange Rate Trends Lower Despite Widening UK Deficit
The Euro to Pound Sterling (EUR/GBP) exchange rate continued trending in a softer position ahead of the ECB policy announcement and was little effected by UK data showing an increase in the budget deficit.
The widening in the shortfall from 10.3 billion Pounds to 13.1 billion Pounds on the year was largely due to a 2.9 billion contribution to the European Union.
As the European session progressed the EUR/GBP pairing was trading in the region of 0.7655
The Euro to Pound Sterling (EUR/GBP) exchange rate could surge later today following the European Central Bank’s (ECB) policy decision.
EUR/GBP Exchange Rate Recovers Ground on BoE Minutes
On Wednesday the Euro to Pound Sterling (EUR/GBP) exchange rate recouped some of its recent losses as the Bank of England (BoE) published unexpectedly dovish minutes from its January meeting.
The minutes showed that recent disinflationary pressures in the UK prompted the two previously hawkish members of the BoE to retract their votes in favour of immediate interest rate hikes.
As the development makes it even more unlikely that borrowing costs will be adjusted before next year, the news sent the Pound spiralling lower against several of its main counterparts.
The Euro to Pound Sterling (EUR/GBP) exchange rate brushed a low of 0.7670
Although the UK’s employment report was, in the main, fairly encouraging, the data failed to have a supportive impact on Sterling as investors preferred to dwell on the BoE minutes and the almost global attitude of maintaining low or negative interest rates.
The Euro to Pound Sterling (EUR/GBP) exchange rate achieved a high of 0.7643
However, before the close of trading the Euro pared its advance in response to a ‘leaked’ report from an ECB official regarding the central bank’s quantitative easing intentions.
The Euro slipped against the Pound and neared an 11-year low against the US Dollar.
According to industry expert Thomas Averill; ‘The Euro decision is kind of well telegraphed but Euro-Dollar does have more to go on the downside. The Eurozone economy seems pretty sluggish at the moment and needs QE.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Fluctuate
The Euro to Pound Sterling (EUR/GBP) is liable to experience extensive volatility today as, after weeks of speculation, the European Central Bank finally delivers its monetary policy decision.
If yesterday’s ‘leaked’ reports prove accurate and the central bank settles on a 50 billion Euro per month asset purchasing target, the duration of the scheme will dictate the direction the Euro to Pound exchange rate takes.
A scheme of one year would amount to roughly 600 billion Euros – which many analysts feel would be inadequate to counter disinflationary pressures in the Eurozone. The Euro may climb if such a programme is outlined.
However, a two year scheme would mean asset purchases amounting to over 1 trillion Euros and could cause a significant weakening in the common currency.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7655
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3063
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1602
The US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8630