The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.37 on Monday as economists look ahead to the week’s upcoming data releases. The Pound Sterling to US Dollar (GBP/USD) exchange rate softened to trade in the region of 1.56 as the ‘Greenback’ recovered from last week’s sharp losses.
The Pound Sterling to Euro (GBP/EUR) Exchange Rate was trading in the region of 1.3801
Early in the session, the Pound weakened broadly as domestic economic data showed that house prices dropped in May. The report compiled by Rightmove showed that London property prices fell the most in nine months as worries over the general election weighed. Property owners were particularly concerned over the Labour party’s plans to impose a mansion tax if it won. With the vote done and dusted, and the Conservatives in power, we can expect prices to rally strongly in next month’s figures.
‘Pre-election jitters finally came home to roost in the final weeks of electioneering. This is an election driven price stall, which gives some buyers only short-term relief from the backdrop of a long-term housing shortage. Election uncertainty and particularly the threats of financial penalties to non-doms and those with properties valued at over two million Pounds put a brake on the market,’ said Rightmove director Miles Shipside.
Greece Worries Weigh upon Euro (EUR) Exchange Rate
As the session progressed, the Pound firmed against the Euro as investors once again focused on the situation in Greece. Uncertainty remains high as to whether Greece will be able to negotiate economic reform measures in time to prevent a default.
According to leaked letters, the International Monetary Fund (IMF) appears to have little faith that a deal will be reached in time. Rumours are growing that Athens could be given an ultimatum; a move that is likely to force the SYRIZA led government to hold a referendum.
The Greek government has announced that it hopes to reach a deal by the end of May but insisted that it is sticking to its red lines on pensions and state wage cuts.
‘There’s no doubt that an agreement must be reached but those who think that the Greek side’s resistance can be tested or that its red lines will fade as time passes , would do well to forget it,’ said Prime Minster Alexis Tsipras last week.
The Pound Sterling to US Dollar (GBP/USD) Exchange Rate was trading in the region of 1.5675
The Pound Sterling softened against the US Dollar as the ‘Greenback’ recovered from sharp losses seen in the previous week.
Despite the gains the US Dollar remained under pressure after data on Friday showed that U.S. industrial production fell for the fifth straight month in April and another report showed that U.S. consumer sentiment deteriorated to a seven month low this month.
Tuesday’s UK inflation and PPI data could offer the Pound some support. The Euro meanwhile will be influenced by Eurozone inflation and ZEW economic sentiment data.