Decline in UK Unemployment Pushes GBP/EUR to 1.40
Although the Euro was deriving some support from the fact that French growth and German inflation figures exceeded expectations, the Pound Sterling to Euro (GBP/EUR) exchange rate was still able to jump above 1.40 on Wednesday.
The prospect of an upbeat inflation report from the Bank of England (BoE) coupled with a welcome decline in UK unemployment (from 5.6% to 5.5%) saw the Pound rally early in the European session.
Average earnings both including and excluding bonuses were shown to have climbed in the three months through March, giving the Pound a further boost.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3993 after hitting a high of 1.4017
Newsflash: GBP/EUR Recovers Losses on Encouraging UK Manufacturing Data
As the UK’s Industrial and Manufacturing Production data showed a faster-than-expected pace of output on both a monthly and yearly basis, the GBP/EUR exchange rate trimmed earlier losses and advanced from 1.3833 to 1.3978.
The growth figure compiled by the National Institute of Economic and Social Research (NIESR) also pointed at the UK economy picking up momentum in April.
NIESR stated; ‘We expect the slight softening of GDP growth experienced in the first quarter of this year to be temporary and forecast the UK economy will expand by 2.5% for the year as a whole.’
Tomorrow the BoE’s inflation forecast will be the main driver of Sterling movement.
A hawkish statement from the central bank would bolster the Pound against the Euro.
Newsflash: GBP/EUR Falls from 1.40 to 1.38 as EU Referendum Pegged for 2016
After Greece avoided defaulting on its debt repayment to the IMF, the Pound pared some of its recent gains against the Euro.
The GBP/EUR exchange rate edged lower still after reports indicated that the newly elected Conservative government plans to bring forward the controversial in-out EU referendum to next year.
According to one source; ‘The mood now is definitely to accelerate the process and give us the option of holding the referendum in 2016. We had always said that 2017 was a deadline rather than a fixed date.’
If today’s UK Industrial/Manufacturing Production figures impress, the Pound could recoup losses, but subpar results would drive Sterling lower.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3852
Newsflash: Pound Sterling to Euro (GBP/EUR) Exchange Rate Trends at 1.40
Before the close of trading, the Pound Sterling to Euro (GBP/EUR) exchange rate hit 1.4004 as investors remained on edge ahead of tomorrow’s Greek debt payment to the IMF.
Will the Hellenic nation default? That remains to be seen. But if Greece can’t find the funds, the GBP/EUR exchange rate could climb higher still.
GBP/EUR Exchange Rate Advances beyond 1.39 as Greek Negotiations Make no Progress
A frustrating lack of progress in the latest round of Greek bailout discussions helped the GBP/EUR exchange rate advance above 1.39 over the course of the European session.
With Greece’s 750 million payment to the IMF fast approaching, the nation seems no closer to securing the emergency funds it needs.
German Finance Minister Wolfgang Schaeuble commented; ‘Progress isn’t such that any decision is to be expected today.’
The GBP/EUR exchange rate was little changed after the BoE left fiscal policy unchanged, as expected by economists.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3894
Pound Sterling to Euro (GBP/EUR) Exchange Rate Trending above 1.38 before BoE Announcement
Although today’s Bank of England (BoE) interest rate decision is expected to be fairly predictable (with industry experts envisaging no alterations to either interest rates or quantitative easing) the Pound was still able to post a modest gain against the Euro ahead of the announcement.
The GBP/EUR pairing drifted higher as the prospect of Greece defaulting on tomorrow’s payment to the International Monetary Fund (IMF) wore on the common currency.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3819
After rising to 1.38 on the back of the UK general election outcome, the Pound Sterling to Euro’s (GBP/EUR) uptrend could be set to continue this week if Bank of England (BoE) policymakers turn hawkish and the Greek bailout negotiations fail to progress.
Pound Sterling to Euro (GBP/EUR) Exchange Rate News – Pound Rallies to 1.38 on UK Election Victory for the Conservatives
The UK election yielded a result no one expected (an outright win for the Conservative party) and the prospect of a calm political outlook and the continuation of current austerity measures drove the Pound Sterling to Euro (GBP/EUR) exchange rate to a 2% advance – its most impressive gain for six years.
As well as rallying against the Euro, the Pound performed well against the US Dollar with the GBP/USD exchange rate leaping from 1.52 to 1.55 before the US Non-Farm Payrolls number tempered gains.
All polls and expert analysis pointed at the election ending with a hung parliament, with either Labour or the Conservatives heading up a coalition after perhaps days of political wrangling.
The actual result was clear cut, decisive and had an immediately stabilising impact on previously volatile markets. After the votes were tallied, the leaders of the Labour, Liberal Democrat and UK Independence Party all resigned their posts.
Industry Expert Reaction to 2015 UK General Election Result
Jason Hughes said of the development; ‘The market often likes a bit of consistency and stability and if the Conservatives are returned to power… they will be able to push through a lot of the policies and approaches that they have done over the last five years in parliament.’
Bill O’Neil noted; ‘The odds were stacked against such a decisive outcome. This result is far less complicated than the market’s worst fears.’
However, Daily FX observed; ‘It seems as though the British Pound has turned the corner after surviving a potentially contentious UK general election. Yet further gains are far from certain; it will be important to track the coming week’s BoE statements to gauge the likelihood of further GBP strength.’
This Week’s Euro (EUR) Exchange Rate Outlook – ‘Brexit’ Concerns May Weigh on the Pound, but ‘Grexit’ Fears Dent EUR/GBP Outlook
The Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates may have surged in response to the calmer political waters, but Sterling’s uptrend was tempered by fears related to the in-out EU referendum promised by the Conservatives on their re-election.
While the referendum wouldn’t be held until 2017, the possibility of a ‘Brexit’ (a British exit from the European Union) cast dark shadows over the Pound’s future performance.
Sub-par UK trade figures also limited Sterling’s gains, although this result was largely balanced by a slide in German Industrial Production.
The GBP/EUR exchange rate was also deriving support from the lack of progress in the Greek bailout negotiations.
Wolfgang Schaeuble, the outspoken German Finance minister, warned over the weekend that Greece faces defaulting by accident if it continues ‘playing chicken’ with its creditors.
Greece has a large debt repayment looming, and many industry experts don’t see the nation coming up with the funds needed to make it. If Monday’s gathering between Eurozone Finance Ministers and the European Central Bank (ECB) doesn’t go well, the odds of a ‘Grexit’ will rise and the Euro could fall against peers like the Pound.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast – UK Employment Data, BoE Interest Rate Decision, Eurozone Growth Data Ahead
The Pound Sterling to Euro (GBP/EUR) exchange rate could enjoy a further run of gains this week if key UK reports impress and the odds of a ‘Grexit’ rise.
In terms of UK news, the most influential reports promise to be the nation’s employment figures, the BoE’s interest rate decision and the central bank’s inflation report.
A strong jobs gain, reduction in the UK unemployment rate or rise in average earnings would all be Pound-positive developments.
The last batch of BoE minutes indicated that policymakers were on the verge of becoming split on the subject of interest rates.
If the Conservative’s election win bolsters confidence that the UK’s economic recovery will continue and the Monetary Policy Committee (MPC) divides, the Pound may well surge off the back of a more hawkish outlook for borrowing costs.
We may even see the GBP/EUR exchange rate return to trending around the seven-year highs recorded back in March on the introduction of quantitative easing from the European Central Bank (ECB).
That being said, if the BoE’s inflation report reveals negatively revised growth or inflation projections, Sterling may give up some of its recent gains.
The Eurozone is also set to publish growth and final inflation data over the course of the week.
On Sunday the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3803 the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5458