Lowered Consumer Confidence Hurts Sterling (GBP) as Retail Sales give Euro (EUR) Boost Today
A declining Consumer Confidence Survey negatively impacted the Pound (GBP) last night, taking some of the wind out of the currency’s sails. With little else in the way of data upcoming before the weekend Sterling will most likely be at the mercy of news from its rivals for the next few days.
Mixed Retail Sales for Germany saw the GBP/EUR exchange rate drop early this morning to 1.4225 as year-on-year improvement provided the rally the common currency had been in need of. However, at time of writing, the pairing has begun to recover somewhat to trend in the region of 1.4237.
Disappointing unemployment data from Germany dampens the potential for Euro (EUR) resurgence as bullish Sterling (GBP) pushes the exchange rate towards new highs.
UK’s GDP Report Keeps Pound Buoyed as Greek Worries Plague Softening Euro, GBP/EUR Exchange Rate Continues Upwards Trend
Continuing to run on a hawkish trend in the wake of Tuesday’s as-expected UK GDP figures, the Pound (GBP) pushed further towards a new eight-year high against the Euro (EUR) this week. Indicating stronger growth compared to the previous quarter and an improvement in local economic conditions, the report was fast to encourage bullish trading and raise demand for Sterling.
Greek concerns overshadowed the fortunes of the common currency in spite of a positive opening to the week that had seen the GBP/EUR pairing fall to a low of 1.3982. Good numbers from the IFO assessments in Germany were soon forgotten as yet more controversy arose from Athens. News of a shady ‘Plan B’ fronted by former finance minister Yanis Varoufakis, which was designed to allow rapid liquidation of the Euro and a switch back to the Drachma, clearly bothered pundits and saw the GBP/EUR exchange rate quickly regaining lost ground as it trended rapidly upwards.
Euro (EUR) Denied Rally Today with German Unemployment Rise, Mortgage Approval Growth Good for Sterling (GBP)
Positive mortgage approvals for the UK continued to shore up the Pound as they confirmed a decided increase in lending by the nation’s banks, 66.58 thousand over last month’s 64.83 thousand, to come in above forecast. Yet more optimistic signs of economic recovery are no doubt encouraging more hawkish sentiment, especially as major competitors continue to weaken in the midst of market turmoil.
Hopes for a Euro rally were dashed this morning however as German unemployment was revealed to have dramatically increased, rising by 9,000 rather than the anticipated fall of 5,000. The highest increase since September last year points to a growing job shortage in one of Europe’s most robust economies, a significant concern despite the jobless rate remaining steady at a twenty-five year low of 6.4%.
Greek Prime Minister Alexis Tsipras recently began uttering threats of snap elections should members of his left-wing party remain rebellious over the ream of austerity measures the government must enforce to secure its next bailout from creditors. The risk of further instability from Greece naturally impacted the Euro badly, encouraging yet more dovish trading.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: Further Slump Could be in Store for Euro with Consumer Price Indexes Imminent
After all the major data releases of the previous days only the Consumer Confidence Survey remains upcoming for the UK this week. While this could potentially help spur the GBP/EUR exchange rate to a fresh peak, the pairing is likely to be more effected by developments out of the Eurozone in the near future.
Consumer Price Indexes for Germany and the Eurozone, along with German Retail Sales, are all expected to have a significant impact on the strength of the Euro. Should the current trend of disappointing figures continue the common currency could see itself slipping still further in value before the week is out.
As bailout talks progress in Greece the exchange rate will likely remain sensitive to developments, particularly as the deadline for a 3.4 billion Euro payment to the European Central Bank (ECB) looms.
As of writing the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4220.