The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in a narrow range today ahead of the UK Construction PMI for July, due out later today.
Incoming PMI Data may Swing GBP/EUR Back in Pound’s Favour
Although the Pound Sterling to Euro (GBP/EUR) exchange rate hasn’t improved since yesterday, the Pound (GBP) still stands to gain against the Euro (EUR) today and on Thursday. The July Construction PMI figure has been forecast optimistically, with slight growth to 58.5 compared to last month’s figure of 58.1.
This result, as well as the outcome of the Bank of England (BoE) Monetary Policy Committee (MPC) meeting on Thursday, have the potential to bounce the Pound back against the Euro as any hints of an interest rate hike later in the year will likely strengthen the GBP/EUR pairing considerably.
The Pound Sterling to Euro (GBP/EUR) exchange rate has declined since this morning, and is now trending in a narrow range.
Fluid Greek Situation Strengthens Euro to Pound Sterling (EUR/GBP) Exchange Rate
Despite seeing an increase from 51.4 to 51.9 in the UK Manufacturing PMI figure for July, the Pound Sterling to Euro (GBP/EUR) exchange rate has fallen from the earlier gain of 0.2%. This result is likely due to the situation in the Eurozone, given that even this minor rise in the PMI figure is positive news for the UK economy.
Although the Athens stock exchange (Athex) crashed shortly after opening this morning, this result was expected, and the situation has since improved, stabilising the Euro’s (EUR) performance. Stocks in banks were hit particularly hard, dropping by as much as -30% in the hours after the exchange opened. However, this news was balanced by the fact that Athex and the Greek banks have actually reopened, having remained closed since June 29th to prevent a financial collapse. Strict cash withdrawal limits remain in place.
The Pound Sterling to Euro (GBP/EUR) exchange rate has risen slightly today ahead of the release of the UK July Manufacturing PMI data, which has been forecast to show minor growth.
Pound Sterling to Euro (GBP/EUR) Exchange Rate News: Imminent UK Data could Extend Pound’s Gains
The Pound Sterling to Euro (GBP/EUR) exchange rate has risen by 0.2% today, and the Pound has also seen greater gains elsewhere. These include an increase of over 0.5% against the Australian Dollar (GBP/AUD) and the Canadian Dollar (GBP/CAD), a gain of more than 0.7% against the South African Rand (GBP/ZAR) and a hawkish 3.3% gain against the volatile Russian Ruble (GBP/RUB).
These gains come after last week saw mixed fortunes for the UK economy; UK Q2 GDP figures showed a slight quarterly increase, but a slight decrease year-on-year (YoY), and Net Consumer Credit and Mortgage Approvals for June increased, while the GFK Consumer Confidence Survey for July showed a drop that was greater than predicted.
Euro to Pound Sterling (EUR/GBP) Exchange Rate declines after Athens Stock Market Reopens, Gains Elsewhere against Commodity Currencies (AUD, CAD)
The Euro (EUR) has declined by -0.2% against the Pound Sterling (EUR/GBP) today, as the Athens stock market has reopened to experience the predicted immediate heavy losses. The ‘Athex’ (Athens Stock Exchange) Composite has fallen by -20% and banking shares have dived by a greater -30%. Although the situation is likely to stabilise over the course of the day, this dramatic reaction so soon after the reopening of the Exchange shows just how unstable the Greek economy remains. The next scheduled debt repayment for the Greek government is at the end of this week, with a €1bn repayment to holders of Greek treasury bills.
However, the Euro has proven its resilience against the global commodity currencies today, rising by more than 0.5% against the Australian Dollar (EUR/AUD) and the Canadian Dollar (EUR/CAD), and seeing a greater 0.7% increase against the Polish Zloty (EUR/PLN).
Pound Sterling to Euro Exchange Rate Forecast: GBP/EUR Exchange Rate may Hold Steady if Eurozone Data Disappoints
The Pound Sterling to Euro (GBP/EUR) exchange rate stands to gain this week, as the imminent release of the UK Manufacturing PMI data for July has been forecast for minor growth, and any hints from the Bank of England’s (BoE) Thursday meeting about an interest rate hike taking place later in the year are sure to strengthen the pairing in the Pound’s favour.
However, several key Eurozone figures are also due for release this week, including Retail Sales for June and PMIs for July. If these results exceed forecast figures, the Euro could bounce back against the Pound. As ever, any major developments in Greece could help or hinder the Euro significantly in the EUR/GBP exchange rate.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4258 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7015 today.