The Euro to Pound Sterling (EUR/GBP) exchange rate has risen further today to 0.4%, which comes between a German parliamentary approval of the Greek bailout and its finalisation later tonight.
Better Late than Never as approx. €3.4bn ECB Repayment Looms for Greece
The German parliament approved the Greek bailout package earlier today, and the common currency (EUR) has gone from strength to strength since then. The single currency has been boosted considerably by the prospect of a stable Greece in the future, as the only obstacle to concluding the over-a-month long deal is a final approval by the European Stability Mechanism tonight.
Assuming that it is passed, the deal can’t be closed soon enough, as the Greek government faces having to repay around 3.4 billion Euros to the European Central Bank (ECB) tomorrow. Suffice it to say, the Greek parliament will surely be waiting anxiously for the cheque to clear.
The Euro to Pound Sterling (EUR/GBP) exchange rate has advanced today, as gaining confidence in the Euro (EUR) has combined with a tail-off in support for the Pound (GBP).
EUR/GBP set to Soar if German Dissent is Minimal
The Euro (EUR) has gained by 0.2% against the Pound Sterling (EUR/GBP) today; this comes as the German vote on the Greek bailout proposal continues. Rumours have been rife about a possible rebellion of MPs within German Chancellor Angela Merkel’s Christian Democratic Union (CDU) party. This is primarily due to a rejection of the bailout terms, as well as an uncertainty about what the vote will specifically be on. Klaus-Peter Willsch, a CDU objector, illustrated this point by saying ‘We only received the documents about the vote last night as a 207-page PDF. Many will be reading it on their way back from holiday, but they’ll hardly have time to check the details’.
The Euro to Pound Sterling (EUR/GBP) exchange rate has dived today as the Pound received unexpected support from the UK CPI results for July.
EUR/GBP Fares Poorly as German MPs Threaten to Derail Bailout Approval
The Euro fell by -0.7% against the Pound (EUR/GBP) today as European parliaments continued to vote on whether the third Greek bailout meets with their approval. The common currency has seen a minor gain of 0.3% against the Australian Dollar (EUR/AUD) today, but has dropped by -0.3% against the Swiss Franc (EUR/CHF) and the Indian Rupee (EUR/INR).
This mixed performance comes amid concerns that German MPs may revolt against the sentiment of German Chancellor Angela Merkel and oppose the bailout. The Bundestag voting is due to begin tomorrow from 8am, but despite the support of Merkel and German Finance Minister Wolfgang Schäuble, predictions have been for heavy dissent among Merkel’s Christian Democratic Union (CDU) party.
British Pound Soars Across the Board following Unexpected Rise in UK Inflation Rate
The Pound (GBP) has had a markedly better performance than the Euro (EUR) today, rising by 0.7% against the common currency (GBP/EUR). Sterling has also seen gains of 0.7% against the Canadian Dollar (GBP/CAD) and the Turkish Lira (GBP/TRY) and has gained by 1% against the Australian Dollar (GBP/AUD), the Norwegian Krone (GBP/NOK) and the Russian Ruble (GBP/RUB).
This surge in performance is chiefly due to the UK annual CPI figure for July, which was released this morning. Despite forecasts predicting either stagnation or deflation in the result, the reality showed a 0.1% increase. However small this is, it inspired a great deal of optimism in the Pound as a recent article by Bank of England (BoE) Monetary Policy Committee (MPC) member Kristin Forbes tied a UK interest rate increase to an increase in the inflation rate.
Euro Exchange Rate Forecast to remain Submissive as GBP/EUR Continues Uptrend
The Euro (EUR) is unlikely to recover against the Pound (EUR/GBP) today as there are no other major European economic results due. Additionally, given how unexpected the UK inflation rate rise was, the Pound (GBP) is unlikely to run out of steam in the near-future.
Current EUR, GBP Exchange Rates
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7053 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4173 today.