Pound Sterling to Euro (GBP/EUR) Exchange Rate Dips from 1.42 before Recovering Losses
The Pound Sterling to Euro (GBP/EUR) exchange rate looked on course to return to trending at its best exchange rate of the year so far prior to the publication of the UK’s latest jobs numbers.
However, with average earnings increasing by less than projected and the jobless rate rising unexpectedly, the Pound swiftly fell from its recent highs before rebounding later in the local session.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4244
UK Inflation Slows, GBP/EUR Could Fluctuate on ZEW Data
Although the Pound Sterling to Euro (GBP/EUR) exchange rate came away from Monday’s highs during Tuesday’s European session, the pairing managed to hold above the 1.40 level in spite of a slowing in consumer price gains.
The UK’s annual CPI slipped from 0.1% to 0.0% on the year – taking it perilously close to deflation territory.
However, bets that tomorrow’s UK employment data will show an increase in average earnings and ongoing Greek concerns prevented the Pound falling too far.
If today’s German and Eurozone ZEW economic sentiment surveys show the anticipated decline, the GBP/EUR exchange rate could recoup losses later today.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4016
The Pound Sterling to Euro (GBP/EUR) exchange rate gained by more than 1% during the European session in spite of the reports that Greece had, finally, reached an agreement with its creditors.
Speculation that there are still considerable hurdles to mount saw the GBP/EUR pairing hit a high of 1.4067.
Pound Sterling to Euro (GBP/EUR) Exchange Rate News: UK Trade Data Boosts Sterling ahead of Inflation, Employment Reports
The Pound Sterling to Euro (GBP/EUR) exchange rate gained on Friday as the UK’s better-than-forecast trade data lent the British asset support.
To the surprise of economists, Britain’s trade deficit narrowed to a two-year best in May as the level of imports declined.
Although the data did offer the Pound a boost against peers like the US Dollar and Euro, gains were limited as the report highlighted an ongoing weakness in exports.
Economist Howard Archer of IHS Global Insight stated; ‘While May’s sharply reduced trade deficit is very welcome, it is disappointing that it was due to a marked 3.2% fall in total imports while exports were only flat. In fact exports of traded good excluding oil dipped 2.3% month-on-month in May while exports of services only eked out a gain of 0.2%.’
If the spotlight on the Greece situation dims this week, fluctuations in the GBP/EUR currency pair will return to being caused by ecostats from the UK and Eurozone – including tomorrow’s UK inflation data.
Economists are expecting the annual rate of inflation to come in flatly on the year in June after a modest annual increase of just 0.1% in May. A dip in consumer price gains or return to deflation would be Pound-negative.
The UK’s latest employment stats, scheduled for publication later in the week, are also likely to have an impact on GBP/EUR trading in the days ahead.
Euro to Pound Sterling (EUR/GBP), US Dollar (EUR/USD) Exchange Rate Down as Greece Brokers Debt Deal – Is a Grexit Still Likely?
Both the Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates recorded declines on Monday despite progress finally appearing to be made in the Greek bailout negotiations.
Last Thursday Greece presented its creditors with the latest draft of its reform proposal. Initial responses to the document were positive and it was largely expected that a deal would be struck during an emergency summit scheduled to be held on Sunday.
However, talks went on for almost 17 hours before it was announced that the Greek Prime Minister Alexis Tsipras has made the concessions demanded in order for Greece to secure its third bailout package.
Head of the International Monetary Fund Christine Lagarde was quoted as saying; ‘It’s been a laborious night. It’s a good step to rebuild confidence.’
Meanwhile European Commission head Jean-Claude Juncker stated; ‘There will not be a ‘Grexit’.’
Although a deal means that Greece is likely to remain part of the Eurozone, demand for the Euro fell as investors remained concerned that Tsipras will have a hard time getting both his government and his public to accept further austerity.
The EUR/GBP exchange rate fell by 1.0% while the EUR/USD exchange rate dropped 0.7%.
Today’s Pound Sterling to Euro Exchange Rate Forecast: Greece, UK CPI & ECB Rate Decision Predicted to Impact Currency Market Movement, Could GBP/EUR Return to Best Rate of 2015?
As Greece moves closer to unlocking vital bailout funds, the Pound Sterling to Euro (GBP/EUR) exchange rate could well decline over the next few days.
However, if the Greek parliament refuses to pass the austerity measures or the public rises up against the decision, the Euro will remain under pressure.
The Pound could also climb back to close to its best level of 2015 against the Euro if this week’s UK reports support Bank of England (BoE) interest rate hike expectations.
As highlighted above, the inflation and employment reports are likely to have the biggest impact on trading.
In terms of news from the Eurozone, investors will be focusing on the European Central Bank’s (ECB) interest rate announcement, due towards the end of the week.
Tomorrow’s ZEW Economic Sentiment surveys are also likely to affect demand for the Euro, with German confidence forecast to have declined.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4057, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5576, the Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1076 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7112.