The Euro to Pound Sterling (EUR/GBP) exchange rate softened by around -0.20% on Tuesday morning.
Although UK BRC Sales Like-for-Like was unable to meet with the median market forecast of 0.5%, the result of 0.2% was still an improvement on the previous figure. As a result, the Pound edged higher versus many of its major peers. The gains are likely to be tempered, however, whilst traders await several British data publications due later on Tuesday morning.
The share currency, meanwhile, is generally trending lower versus its most traded currency rivals. This can be attributed to continued anxieties regarding the potential for a Greek exit from the Eurozone.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7426.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Clings to 0.2% Gain
As the European session progressed on Monday, the Euro to Pound Sterling (EUR/GBP) exchange rate just managed to hold on to its 0.2% gain in spite of the pressure of growing ‘Grexit’ concerns.
Concerns that the Greek negotiations could really deteriorate over the next couple of days limited the Euro’s advance following the publication of an impressive Sentix Confidence Index for the currency bloc.
The sentiment measure rallied to 12.4 in February from 0.9 in January, defying forecasts for a reading of 3.0.
European data is lacking tomorrow, but the UK’s industrial/manufacturing figures could prove influential for the EUR/GBP pairing.
EUR/GBP Exchange Rate Gains on German Trade Data
Although Greek Prime Minister Alexis Tsipras confirmed his nation’s rejection of its international bailout over the weekend, heightening the odds of a ‘Grexit’, the Euro was able to advance by over 0.2% against the Pound during the European session as Germany published encouraging trade data.
Exports from the Eurozone’s largest economy were shown to have increased by a seasonally adjusted 3.4% on the month in December rather than the 1.0% expected.
This helped Germany post a record level current account surplus across 2014 as a whole.
If today’s Sentix investor confidence index shows the increase from 0.9 to 3.0 expected by economists, the Euro could post additional gains in the hours ahead.
The Euro to Pound Sterling (EUR/GBP) exchange rate may continue trending in the region of a 7-year low over the course of the week as the Greek debt negotiations progress.
EUR/GBP Exchange Rate Driven Lower by Greece/ECB Standoff
After declining steadily over five days of trading, the Euro to Pound Sterling (EUR/GBP) exchange rate closed out the week languishing at a multi-year low.
While the Pound was bolstered by encouraging Manufacturing, Construction and Services figures, the Euro slipped in response to indecisive negotiations between the Greek government and European officials.
Greek Finance Minister Yanis Varoufakis and German Finance Minister Wolfgang Schäuble reportedly clashed at their recent meeting.
Germany is famously against conceding to Greece, and Varoufakis left their tête-à-tête voicing concerns that an unyielding Germany could result in the rise of the far-right Golden Dawn party – a group likened to the Nazis.
He stated; ‘No one understands better than the people of this land how a severely depressed economy, combined with a ritual national humiliation and unending hopelessness, can hatch the serpent’s egg within its society. When I return home tonight, I will find a country where the third-largest party is not a neo-nazi party, but a nazi party. We need the people of Germany on our side.’
Euro to Pound (EUR/GBP) Exchange Rate Forecast
Over the next five days any notable progress in the Greek debt negotiations could cause movement in the Euro to Pound (EUR/GBP) exchange rate.
If it appears that the Greek parliament has no intention of backing down, and that the European Central Bank (ECB) will not bow to their demands for renegotiation, the Euro is likely to slide.
Additionally, the Eurozone is set to publish several reports during the week which could have an impact on EUR/GBP trading.
The key releases to be aware of on Monday are Germany’s trade figures and the currency bloc’s Sentix investor confidence index.
An improvement on the 0.9 sentiment figure recorded last month would be well received.
On Tuesday and Wednesday UK news and the Greek negotiations will be driving movement in the Euro to Pound currency pair.
While this week’s British economic calendar is unlikely to be as influential as last week’s, the nation will be releasing the British Retail Consortium’s Like-for-Like sales figure, industrial/manufacturing production numbers and the National Institute of Economic and Social Research’s GDP estimate for the three months through January.
As a markedly slower pace of growth might deter the Bank of England (BoE) from increasing interest rates, a below-forecast report would be Pound negative.
The BoE quarterly inflation report is also due to be released on Thursday.
Thursday sees the publication of Germany’s final inflation figures and the Eurozone’s industrial production report.
If Germany’s poor factory output figure has an adverse impact on the Eurozone’s own result it could force the Euro lower.
The close of the week could see some notable EUR/GBP volatility as the Eurozone and its largest economies will be issuing growth data.
If the pace of expansion in key regions like France and Germany falls short, the Euro may end the week trending in a weaker position against its British counterpart.
On Sunday the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7421
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3462
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1320
The US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8834