The Euro to Pound Sterling (EUR/GBP) exchange rate has increased today, as the surety of a successful Greek bailout tomorrow has been called into question.
Euro (EUR) Resumes Unsteady Performance as German Finance Ministers Stall Proceedings
The Euro (EUR) has fallen by -0.4% against the Pound Sterling (EUR/GBP) today, as the value of single currency has dived ahead of tomorrow’s supposed conclusion to the current Greek bailout talks. Although the Euro had rallied throughout the week on the hopes that an agreement would be reached quickly and cleanly, today has seen that optimism dissipate. Although plans are to have the bailout negotiations wrapped up by tomorrow afternoon, the 400-page document still has to make its way through the Greek parliament overnight and meet with the approval of Eurozone finance ministers in Brussels in the afternoon.
This is where the uncertainty lies; German finance ministers have so far shown a lack of support for the proposal, and yesterday the Federal Ministry of Finance (FMoF) stated that they had ‘formulated questions’ over the proposal, and that ‘These are part of the review process which is not yet completed’. Any indecision on the part of the FMoC will drag on proceedings, which will further increase the likelihood of no deal being reached tomorrow.
The Euro to Pound Sterling (EUR/GBP) exchange rate has risen considerably today after the UK Employment figures damaged the Pound’s (GBP) performance.
Euro (EUR) furthers gains after Industrial Production Data adds to Eurozone optimism ahead of Greek Bailout Conclusion
The Euro (EUR) has risen against the Pound Sterling (EUR/GBP) by 0.9% today, and has seen greater advances of 1.2% against the Australian Dollar (EUR/AUD) and the South African Rand (EUR/ZAR) and a major rise of 1.7% against the Indian Rupee (EUR/INR).
This comes after the Eurozone year-on-year (YoY) Industrial Production figure for June showed a 1.2% increase. Although this was below both the forecast increase of 1.7% and the previous result of 1.6%, this shortfall hasn’t dragged on the Euro’s performance. The common currency has been on an uptrend since Monday after Greek officials announced that the bailout negotiations would be concluded this week. An update today placed the completion time for Thursday night, and the Euro is expected to remain strong against its competitors until that time.
For the Pound Sterling (GBP), the only data of the day has been mixed, seeing a -63K increase in job losses for the three months through June, a -4.6K decrease in the number of Jobless Claims for July, and a 2.4% increase in yearly Average Weekly Earnings for the three months to the end of June, which fell below the forecast increase.
The Euro to Pound Sterling (EUR/GBP) exchange rate has trended in a narrow range today, although the common currency has risen considerably elsewhere.
Euro to Pound Sterling (EUR/GBP) Exchange Rate News: Greek Bailout Optimism Not Dampened by German ZEW Survey
The gains made by the Euro (EUR) today include a rise of 0.5% against the Canadian Dollar (EUR/CAD) and greater gains of 0.8% against the Indian Rupee (EUR/INR) and the South African Rand (EUR/ZAR). The biggest rise for the single currency today has been an advance of more than 1.1% against the New Zealand Dollar (EUR/NZD) and the Australian Dollar (EUR/AUD).
This has come after Greek Finance Minister Euclid Tsakalotos announced that ‘Two or three small issues’ were the only things standing in the way of a successful bailout agreement for Greece. Talks went on throughout the night, but this morning, a Greek official said ‘Finally, we have white smoke’, a reference to a Papal chimney signal indicating that a decision has been made. The value of the encouraging news was shown in full after the German ZEW Survey of Economic Sentiment for August figure fell short of expectations; the Euro retained its hold over other currencies in spite of this.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Unlikely to Change Until Key UK Data Release Tomorrow
The Pound Sterling (GBP) has been in a stalemate against the Euro (GBP/EUR) today, with neither side holding a distinct advantage. The only UK data release today was the BRC yearly Like-For-Like Sales figure for July; this showed a 1.2% increase over the forecast 1%, but this wasn’t enough to give the Pound the advantage in the GBP/EUR pairing.
The Pound has made major gains elsewhere, however, seeing an increase of over 0.8% against the Mexican Peso (GBP/MXN), the Russian Ruble (GBP/RUB) and the South African Rand (GBP/ZAR). Larger rises were seen against the Singapore Dollar (GBP/SGD) and the Australian Dollar (GBP/AUD), with an over 1.2% rise against both currencies. The greatest gain for the Pound today has been a 1.8% increase against the massively devalued Chinese Yuan (GBP/CNY).
Euro to Pound Sterling Exchange Rate Forecast: UK Data may Boost Pound but Greek Deal Closure could turn EUR/GBP Bullish
The Pound and the Euro stand to gain in the coming days, but the advantage seems to be on the Euro’s (EUR) side at this point in time. The UK’s major data release this week is due tomorrow; the Jobs Claims figures for July and the Earnings and Employment results for June. Given the range of fields that will be covered, any signs of an overall improvement in the UK economy are likely to rally the Pound (GBP) against the Euro (GBP/EUR).
However, for once looming events in Greece have been positive for the Euro, and a quick and decisive conclusion to the bailout negotiation this week is likely to send the common currency soaring against its rivals in the immediate aftermath. More concretely, the German and Eurozone Q2 GDP data is due on Friday, and forecasts have been optimistic across the board for the Eurozone economy.
Current EUR, GBP Exchange Rates
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 1.4138 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 0.7074 today.