EUR/GBP Trends Lower as Following Second Bombing Incident
The Euro has rebounded from yesterday, despite news that the Greek soccer federation headquarters had to be evacuated on Wednesday following a tip-off by an anonymous caller who said a bomb had been planted in the building. No bomb was found and it is believed that the call was a response to the violent clashes between fans of rival football teams Panathinaikos and Olympiakos Piraeus, rather than Tuesday’s anti-austerity blast.
The Euro had previously plummeted against Pound Sterling in the wake of a bomb attack outside the headquarters of the business federation in Greece. The blast, in which no one was injured, is suspected to have been planned by anarchists angry at the current harsh austerity measures gripping the country.
In positive news, Greece may soon be able to identify 10,000 suspected tax dodgers thanks to data handed over by Germany, which links Greek citizens and companies to around $3.9 billion in Swiss bank accounts. The German state of North Rhine-Westphalia bought the data from a whistle-blower, spooking 100,000 citizens to admit to tax evasion.
The EUR/GBP exchange rate is currently trading down 0.2% up around 0.7038.
The Euro is sliding today despite positive economic news over the past few days, with investors recalling the dovish speeches by European Central Bank (ECB) Governor Mario Draghi on the sluggish state of Eurozone growth. Meanwhile Pound Sterling has rebounded as the shock of a public finance deficit wears off.
EUR/GBP Exchange Rate News: Better-than-Expected German Business Sentiment Briefly Bolsters Euro
The Institute for Economic Research business surveys have all shown a larger-than-anticipated increase in positive sentiment towards the German economic climate. Released yesterday, the Business Climate survey saw an unexpected rise from 108.2 to 109.0 while the Current Assessment increased to 113.4. German Expectations also rose from 103.8 to 104.7.
The results came after news that German Gross Domestic Product Year-on-Year (YoY) growth has remained steady at a non-seasonally adjusted 1.8%. Monday’s PMIs showed further good news for Germany and the Eurozone, with both manufacturing and services printing higher than expected. The Composite Index for Germany has risen from 54.2 to 54.9, while the Eurozone Composite Index increased to 54.4, up from 53.9.
After two days of strong advances the common currency is now trending down -0.3% against Pound Sterling, as the continued threat of additional monetary stimulus from the ECB weighs on the market.
The EUR/GBP exchange rate is trading in the region of 0.7044.
GBP/EUR Exchange Rate News: Pound Sterling up Ahead of Treasury’s Autumn Statement
With the shock of last week’s government borrowing data fading, investor confidence has returned to the Pound ahead of Chancellor George Osbourne’s Autumn Statement. While it is expected that the Chancellor will announce a new round of spending cuts to accommodate the deficit, government borrowing still represents a saving on last year’s figures. Year-on-Year borrowing is currently 11% down on this point in 2014, with the Chancellor likely to see a £10 billion cut in total borrowing compared to the previous year’s figures.
Despite a strong few days, the Euro is still shaken by underlying geopolitical conflicts. News yesterday suggested that the Parisian financial district, La Defense, was the target of a planned suicide attack on either the 18th or 19th of November. Belgium is still on lockdown following the Paris attacks and the news that a Russian plane was shot down over Turkish airspace could also be causing investor skittishness.
The GBP/EUR exchange rate is currently trending 0.3% up and trading between 1.4114 and 1.4219.
EUR/GBP Exchange Rate Forecast: Euro Could Strengthen if Osbourne Announces More UK Borrowing
It is expected that George Osbourne will need to borrow £5 billion more than he had planned to during this financial year. The Autumn Statement, taking place during the London session, could confirm fears of increased austerity which would see the EUR/GBP exchange rate rise. The results of the German Consumer Confidence index tomorrow and Retail Sales figures on Friday could further strengthen the Euro.
The EUR/GBP exchange rate is currently trading between 0.7031 and 0.7080.