The Euro to Pound Sterling (EUR/GBP) exchange rate has fallen notably today, although this has been just one of a number of losses seen for the single currency. The primary cause of the downtrend was a speech from European Central Bank (ECB) President Mario Draghi.
EUR/GBP Exchange Rate News: Further ECB Dovishness Severely Lowers Euro’s Appeal Today
The Euro (EUR) has dropped by -0.4% against the Pound Sterling (EUR/GBP) today, which has been exceeded by losses of -0.5% against the New Zealand Dollar (EUR/NZD), -0.6% against the South African Rand (EUR/ZAR) and -0.7% against the Australian Dollar (EUR/AUD).
As is becoming increasingly commonplace, Mario Draghi is largely responsible for the devaluation of the single currency today. During a speech in Frankfurt this morning, Draghi indicated that due to chronically low inflation rates in the Eurozone, it was highly probable that more bond buying (or quantitative easing) would be necessary in order to restore energy to the flagging Eurozone economy. In Draghi’s words: ‘the [Eurozone’s] recovery remains very protracted in historical perspective’.
GBP/EUR Exchange Rate Advances Despite Worse-than-Expected UK Borrowing Results
The Pound Sterling (GBP) has achieved a gain of 0.4% against the Euro (GBP/EUR) today, while in other areas the Pound has largely fared well in spite of not entirely supportive domestic data. This comes as a repeat of yesterday’s performance, where the Pound fought back against detrimental UK Retail Sales figures.
The UK October Public Sector Net Borrowing results and those excluding Banking Groups have both fallen compared to previous figures, although not by the reduced levels that some investors had originally predicted. The Public Finances and Central Government NCR for the same month have also both fallen, by -£4bn and -£0.1bn respectively.
The Pound’s gains today include 0.4% against the Russian Ruble (GBP/RUB), the Romanian Leu (GBP/RON) and the Czech Koruna (GBP/CZK). The most notable loss has been by -0.4% against the Australian Dollar (GBP/AUD).
EUR/GBP Exchange Rate Forecast: Final ECB Speech & Eurozone Confidence Score Still to Come
With the last of the UK economic publications of the week now out, it remains for the pairing to be shifted by a pair of events from the Eurozone. These are a speech from the ECB’s Vitor Constancio due in the afternoon and the later announcement of the Eurozone Consumer Confidence figure for November. At the time of writing, the Confidence score was predicted to improve marginally from -7.7 to -7.5.
Although unlikely, it remains a possibility that Constancio could induce a minor Euro uptrend if his speech is particularly hawkish, but given the detrimental impact of Draghi’s words, even a wildly positive outlook may not be enough for investors in the Euro.
Current EUR, GBP Exchange Rates
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.6993 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4303 today.