Euro to Pound Sterling (EUR/GBP) Exchange Rate Sinks to 0.7576 following ECB Announcement
After weeks of waiting, the European Central Bank (ECB) finally delivered its policy statement.
The central bank left interest rates on hold but chose to unveil a quantitative easing programme worth over 1 trillion Euros. The size of the scheme exceeded estimates so the Euro fell against all but one of its currency peers and touched a new 11-year low against the US Dollar.
The decision saw industry expert James Gorman comment; ‘We’ve been waiting for something like this. This is a very important first step and a necessary step.’
The Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7580 as the European session continued.
EUR/GBP Exchange Rate Sheds BoE Minutes Gain before ECB
Although the common currency advanced on the Pound following the publication of surprisingly dovish minutes from the latest Bank of England (BoE) policy meeting, the EUR/GBP pairing shed gains ahead of the ECB announcement.
Bets that the central bank could introduce quantitative easing amounting to 1 trillion Euros pushed the Euro lower against the majority of its currency counterparts.
The Euro to Pound Sterling (EUR/GBP) exchange rate brushed a low of 0.7643
EUR/GBP Exchange Rate Extends Advance
As the European session continued and investors got to grips with reduced Bank of England (BoE) rate hike expectations, the Euro to Pound Sterling (EUR/GBP) exchange rate extended its daily gain to almost 0.9%.
The Euro also advanced on the US Dollar following a mixed bag of housing figures for the US. Building permits registered an unexpected decline while housing starts increased by considerably more than anticipated.
The Euro to US Dollar (EUR/USD) exchange rate gained by 0.7% to trend in the region of 1.1631.
With the ECB policy announcement looming the Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7691.
EUR/GBP Exchange Rate Gains 0.6% After Minutes
Although the UK’s employment figures were largely better-than-anticipated, the Pound fell against the majority of its currency counterparts as the BoE meeting minutes showed that the two hawkish policymakers retracted their votes in favour of immediate rate hikes at the last gathering.
The alteration in votes pushed back rate hike expectations and caused a knee-jerk dip in Sterling demand.
However, the jobs data showed that the UK’s unemployment rate fell to 5.8% from 6.0% and that average earnings increased by the 1.7% expected in the three months through November on the year.
Economist David Kern said of the result; ‘The modest upturn in average earnings growth is a positive development. However, wage growth will only be sustainable if it is matched by increased productivity. The focus of economic policy must remain on sustaining and improving economic growth’
The strength of the employment stats could help the Pound recover losses as trading progresses.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7653
The Euro to Pound Sterling (EUR/GBP) exchange rate registered a one cent daily decline on Tuesday in spite of the Eurozone publishing stronger-than-anticipated economic sentiment reports.
EUR/GBP Exchange Rate Steady, ZEW Confidence Dismissed
While UK data was in short supply yesterday, the two sets of figures for the Eurozone were mixed.
Germany’s Producer Price Index showed steeper-than-forecast declination but ZEW’s economic sentiment surveys for both the Eurozone and Germany printed at multi-month highs.
The positive impacts of the slide in crude oil prices and a softer domestic currency appeared to outweigh concerns relating to the upcoming European Central Bank (ECB) announcement and Greek election.
However, some industry experts took the strong confidence figures with a pinch of salt.
The Euro to Pound Sterling (EUR/GBP) exchange rate hit a low of 0.7615
According to economist Jennifter McKeown; ‘For now, we expect German GDP (gross domestic product) to expand by a steady but unspectacular 1.0% this year and 1.5% next, which will do little to reduce the risk of a long bout of deflation in the Eurozone as a whole. If the Greek situation deteriorates in the aftermath of this weekend’s election or ECB QE disappoints, investors may well take a dimmer view of Germany’s prospects.’
Demand for higher risk assets like the Euro was also undermined by the International Monetary Fund’s negatively revising its growth projections for 2015 and 2016.
The IMF highlighted the headwinds facing the global economy and intimated that only the US is likely to post above-expected growth this year.
Ahead of the release of the all-important UK jobs data, the Pound was holding steady against the Euro and advanced for a second day against the US Dollar.
The Euro to Pound Sterling (EUR/GBP) exchange rate achieved a high of 0.7637
Euro to Pound Sterling Exchange Rate Forecast: Climbing Wages Could See EUR/GBP Fall
Today’s UK employment figures could push the Euro to Pound Sterling (EUR/GBP) to fresh lows during the local session.
If unemployment falls, as it is expected to do, and average earnings increase, it might bring forward Bank of England (BoE) rate hike expectations slightly and could cause a general Pound Sterling uptrend.
That being said, the minutes from the BoE’s latest policy meeting could stymie gains.
If the minutes show that the two hawkish members of the BoE retracted their votes in favour of immediate an immediate rate increase, the EUR/GBP pairing could recover losses.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1575
The US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8637
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7632
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3099