Euro to Pound Sterling (EUR/GBP) Exchange Rate Gains before ECB Decision
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced to a high of 0.7681 on Wednesday following the publication of minutes from the latest Bank of England (BoE) policy meeting.
The minutes revealed that recent disinflationary pressures and domestic economic concerns caused the two previously hawkish members of the Monetary Policy Committee (MPC) to retract their votes in favour of immediate interest rate increases.
This fact counteracted the impact of the UK’s generally positive employment figures and saw the Pound fall against the majority of its currency counterparts.
Sterling was also softer against the Euro ahead of tomorrow’s ECB policy announcement as investors bet that the stimulus package introduced by the central bank won’t be as impressive as needed to support the currency bloc’s flagging recovery.
EUR/GBP Exchange Rate Down 0.6%
Expectations that tomorrow’s UK employment data will show strong jobs growth supported the Pound on Tuesday and the British currency gained on the majority of its peers.
The Euro to Pound Sterling (EUR/GBP) exchange rate fell by 0.6% to trend in the region of 0.7636 as the European session progressed.
If Wednesday’s employment report does show the improvement in employment and average earnings expected by economists, the EUR/GBP pairing could register additional declines.
EUR/GBP Exchange Rate Sheds 0.3%
The Euro to Pound Sterling (EUR/GBP) exchange rate lost around 0.3% on Tuesday as Germany’s Producer Price Index fell to a four-year low.
The annual figure of 1.7% was the worst recorded since 2010.
The currency pair failed to benefit from stronger-than-anticipated economic confidence data for Germany and the Eurozone.
The EUR/GBP exchange rate is currently trading in the region of 0.7663
EUR/GBP Exchange Rate Trends 0.5% Higher
Bets that the Euro’s recent declines were overdone saw the Euro to Pound Sterling (EUR/GBP) exchange rate hold a more than 0.45% gain over the course of the European session.
The Euro remained stronger as construction output in the currency bloc was shown to have fallen by -0.1% on the month in November following October’s positively revised 1.1% gain.
On the year construction output was up 2.2% in November. The previous month posted an annual figure of 0.3%.
The Euro was also able to gain by around 0.4% against the US Dollar, with the EUR/USD exchange rate trading in the region of 1.1614.
According to French President Francois Hollande, the ECB does intend to introduce quantitative easing on Thursday.
Mr Hollande was quoted as saying that the QE programme would lend support to the French economy, but his comments had little impact on the Euro.
The Euro to Pound Sterling (EUR/GBP) exchange rate was able to advance by around 0.2% on Monday as industry experts bet that the European Central Bank (ECB) will disappoint expectations when it gathers on Thursday.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Stronger Before Construction Stats
Last week the Euro to Pound Sterling (EUR/GBP) exchange rate plummeted to a fresh seven-year low.
The common currency flat lined across the board as the Swiss National Bank’s (SNB) decision to remove its 1.20 cap with the Euro was taken to mean that the central bank expects the ECB to roll out an extensive stimulus programme this week.
However, at the start of a new week of trading the Euro recovered some losses amid concerns that the ECB might, once again, fail to take any decisive action.
The Euro to Pound Sterling (EUR/GBP) exchange rate hit a low of 0.7626
The central bank has developed a reputation for promising much and delivering little, and if they fail to announce the level of stimulus believed to be needed to drag the Eurozone out of economic stagnation, the Euro could rally.
The Euro to Pound Sterling (EUR/GBP) exchange rate achieved a high of 0.7653
The Euro held its modest gain against the Pound as data showed that the Eurozone’s current account balance shrunk for a second month.
The current account surplus narrowed from 19.5 billion Euros in October to 18.1 billion Euros in November.
According to FastFT; ‘the Eurozone’s current account remains phenomenally strong, a reflection both of the limp demand in the weaker economies and the exporting prowess of mainly German companies. Deutsche Bank has called the rising current account balance a ‘Euroglut’, and have pointed out that the surplus is even larger than China’s in the noughties. The concern i that it mainly reflects the sickliness of the Eurozone’s economy, will prevent the Euro from falling and helping countries restore growth, and could lead to imbalances and vulnerabilities elsewhere.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast: Will UK Data Push the Pound Higher?
The Eurozone’s Construction Output figures could cause additional EUR/GBP exchange rate movement later today.
Investors will also be looking ahead to Wednesday and the release of the UK’s employment report.
The jobs data is expected to show a decline in the unemployment rate and an increase in average earnings.
If that proves to be the case, the Euro could drop to fresh lows against its British peer.
That being said, a dovish set of meeting minutes from the Bank of England (BoE) could stymie gains.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1593
The US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8623
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7652
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3065