Pound Sterling to Euro (GBP/EUR) Exchange Rate Holding Steady before UK Growth Data
Although industry experts have voiced concerns that the European Central Bank (ECB) may struggle to accumulate all the bonds it needs to support quantitative easing, the Pound’s gains against the Euro were limited ahead of tomorrow’s economic reports for the Eurozone and the UK.
Wednesday’s only British data (the BBA Loans for House Purchase figure) came in above forecast levels, prompting this response from one BBA economist: ‘The housing market appears to be bottoming out with a slight increase in approvals for new purchases in the last month but this is still significantly down on the levels of activity we saw last year.’
Tomorrow’s German employment figures and the UK’s fourth quarter growth data are likely to be the main causes of GBP/EUR movement.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3637
The Pound Sterling to Euro (GBP/EUR) exchange rate’s bullish attitude could continue today if comments from Bank of England (BoE) officials support sooner-rather-than-later interest rate hike expectations.
Pound Sterling to Euro (GBP/EUR) Exchange Rate News: Carney Comments Support Pound
The Pound Sterling to Euro (GBP/EUR) exchange rate achieved a fresh 7-year high on Tuesday as BoE Governor Mark Carney stoked expectations for UK borrowing costs being adjusted at the beginning of next year.
The Pound Sterling to Euro (GBP/EUR) exchange rate achieved a high of 1.3650
Carney reiterated comments made in both the recent inflation report and minutes from the last policy meeting when he asserted that the central bank expects inflation to return to the 2% target within the next two years. He added that while a rate cut could be deployed if the downturn in consumer prices becomes entrenched, the bank is leaning more towards a tightening bias.
Furthermore, Carney also urged employers to support the domestic economy by increasing wages.
He stated; ‘The Monetary Policy Committee will conduct policy in order to bring inflation back to target, probably within two years, and that should inform people, particularly as they are forming judgements about appropriate wages.’
Although the Euro derived support from the news that Greece’s creditors have approved the nation’s reform measures and granted it a four-month extension on its bailout, many remain concerned that this is little more than a dressing on a still-open wound and that the situation could soon deteriorate.
Today both Carney and his deputy Governors are due to speak at a research conference. Hawkish comments would be Pound supportive.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: German Unemployment, UK Growth Ahead
Economic reports for both the UK and Eurozone are in short supply today, so it will be the tone of comments issued by key central bank officials driving movement in the GBP/EUR pairing.
However, it’s a different story tomorrow, with both regions set to publish potentially influential ecostats.
The day starts with the German GfK Consumer Confidence Survey for March.
The Pound Sterling to Euro (GBP/EUR) exchange rate fell to a low of 1.3613
The gauge of sentiment is believed to have risen from 9.3 in February to 9.5.
A result which either meets or exceeds this prediction would be Euro supportive.
Germany will then be publishing its employment figures for February.
Economists have projected that the level of joblessness in the Eurozone’s largest economy fell by 10,000 in February, leaving the seasonally adjusted unemployment rate at 6.5%.
Further Pound Sterling to Euro (GBP/EUR) volatility could be occasioned by the UK’s second estimate fourth quarter growth data.
The initial forecasts for quarter-on-quarter growth of 0.5% and year-on-year growth of 2.7% are expected to remain unrevised.
However, if the UK economy is shown to have expanded by more than this at the close of 2014, it would bring forward BoE interest rate hike expectations and could push the Pound higher.
The Eurozone’s Business Climate, Consumer Confidence, Economic Confidence, Industrial Confidence and Services Confidence measures may also have an impact on trading.
Additionally, the US Consumer Price Index has the potential to inspire considerably market volatility, particularly if the rate of inflation is shown to have fallen further than economists expect.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trading in the region of 0.7326
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5527
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trading in the region of 0.6438
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3648