The Euro to Pound Sterling (EUR/GBP) exchange rate gained by around 0.29% on Friday morning.
After British data failed to meet with the median market forecast, the Pound softened versus many of its major peers. Further declination can be attributed to ongoing political unknowns as we draw nearer to the general election.
The Euro, meanwhile, edged higher versus many of its most traded currency rivals as most experts predict that Greece’s bailout extension and debt repayment programme will be accepted.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7290.
Euro (EUR) Exchange Rate Strengthens on German Imports
As traders await the decision from European officials as to the viability of Greece’s debt repayment programme, the shared currency strengthened versus many of its major rivals. Most expect the programme to gain approval, although there are still some that fear Germany will throw a spanner in the works.
‘If the Greeks violate the agreements, then they have become obsolete,’ said Wolfgang Schaeuble, the German finance minister. ‘Mr Varoufakis had not done anything to make our lives easier,’ he added.
The month-on-month German Import Price Index declined by -0.8% in January, bettering estimates of a drop of -1.1%. On a yearly basis, imports dropped by -4.4%, eclipsing the median market forecast of a -4.6% declination.
The Euro to Pound Sterling (EUR/GBP) exchange rate dropped to a low today of 0.7254.
Pound Sterling (GBP) Exchange Rate Softens on Poor Data
As we draw closer to the general election, political uncertainties have weighed on Sterling trade. The potential for an exit from the European Union is very possible with the anti-EU UK Independence Party and the Tories offering a referendum if they maintain power.
In addition to the general election weighing on the Pound, disappointing domestic data also aided the depreciation. The Consumer Confidence Survey was forecast to rise from 1 to 2, but the actual result held at 1. The Lloyds Business Barometer declined from 52 to 45.
Nick Moon, managing director of social research at GfK, said that a rise in confidence would be unlikely ahead of the general election, stating; ‘Unless there is some dramatic change in the indicators that get media coverage, or people start feeling significantly better off as inflation edges towards zero, it is hard to see any major change between now and the election.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Fluctuate on Geopolitics
Until more is known about Greece’s future in the Eurozone, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to fluctuate. German inflation data will also have a significant impact on the EUR/GBP pairing.
The Euro to Pound Sterling (EUR/GBP) exchange rate reached a high today of 0.7293.