German Consumer Confidence Result Offers No Boost to Softened Euro (EUR), EUR/GBP Exchange Rate Suffers
In spite of investor concern over the latest news from Greece causing the Euro to waver yesterday the common currency is already beginning to see a slight resurgence. However, despite coming in as expected, the German Consumer Confidence Survey appears to have done little to push the EUR/GBP exchange rate back up to this week’s earlier highs in the wake of the UK’s positive GDP data.
Presently the EUR/GBP pairing is trending slightly downwards in the region of 0.7082.
Today’s second quarter GDP report boosted the Pound Sterling against the Euro as the EUR/GBP exchange rate slumped to a low of 0.7073.
Optimistic IFO Assessments Shored up Euro (EUR) and Encouraged Upwards Trend for EUR/GBP Exchange Rate
Lower-than-anticipated PMI results for the Eurozone and Germany last week saw the Euro (EUR) take something of a hit against rivals, pulling it down against the Pound (GBP) to bring the EUR/GBP exchange rate down to 0.7060 on Friday. Negative performance was revealed across the board, even as figures remained higher than the baseline of 50. Falling on the previous month’s numbers there was a decided decrease in the margin of security as the Eurozone reported a 53.7 composite figure rather than 54, with Germany coming in at 53.4 as opposed to 53.9. Nevertheless, the common currency remained above the week’s earlier low of 0.6967, continuing its rally and the long return from the damage done by the Greek crisis.
Friday also saw British mortgage approval figures came in higher than expected, at 44488 rather than the forecast 43300, to strengthen the Pound once more. Although this demonstrates that UK banks are growing more confident in the health of the economy, the report failed to drive down the EUR/GBP pairing any further.
However, Germany’s decisively positive IFO assessments released on Monday spurred an upwards spike in movement for the EUR/GBP exchange rate to take the pairing to a weekly high of 0.7151.
Greek Contingency Dampens Euro (EUR) Prospects, Pound (GBP/EUR) Climbs Today with Target UK GDP Figures
The second quarter GDP for the UK was reported today and squarely hit target, at 0.7% for quarter-on-quarter and 2.6% for year-on-year. An almost immediate surge in trading followed for the Pound, with bullish trends prompted by the positive confirmation of the nation’s recovering economic stability.
Meanwhile, the revelation of a contingency plan by former Greek finance minister Yanis Varoufakis, involving the creation of a parallel banking system to better facilitate an economic shift from Euro to Drachma, appears to be concerning investors as the common currency has softened. Although a Grexit certainly seems a receding prospect, with auditors currently on site in the Hellenic nation to move the bailout forward, this definitely seems to have dampened the previously buoyant outlook.
Together these factors saw the EUR/GBP pairing ceding its gains of the previous day and crashing this morning to a low of 0.7073.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast: Euro Looks to Consumer Price Index for Rally
Consumer Confidence surveys are upcoming this week for both the UK and the Eurozone, with better-than-expected results capable of providing boosts to either currency. The UK’S nationwide housing prices for July will see release on Wednesday, which is also likely to prompt further movement for the exchange rate, although probably not to quite the same degree as today’s GDP figures.
The Eurozone’s Consumer Price Index and Germany’s Unemployment figures, however, potentially look set to rally the Euro. Should these come in below forecast, however, the common currency will remain in its current downturn.
At the time of writing Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7076.