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British Pound to Euro (GBP/EUR) Exchange Rate Forecast to Soften ahead of UK Trade Balance

UPDATE

The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a limited range on Friday morning. Declined by around -0.2% on Friday morning.

As traders await British Trade Balance data, the Pound is trading statically versus its major peers. A slight lean to the downside can be attributed to dovish Bank of England (BoE) and Federal Reserve minutes. Combined, both indicate that the British central bank will not be looking to raise rates before the second half of 2016 at the earliest.

Although sentiment towards the single currency remains damp amid speculation that the European Central Bank (ECB) will expand quantitative easing to provoke price pressures, the Euro edged higher versus some of its peers on Friday morning. The appreciation can be attributed to a greater number of traders delaying bets of a Federal Reserve rate hike into 2016 after minutes showed policymakers were concerned about the global economic slowdown.

The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3571.

Yesterday…

GBP/EUR Conversion rate Softens after BoE Holds Rates

The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.4% on Thursday afternoon.

As traders await the Bank of England (BoE) interest rate decision the Pound is fluctuating versus its major peers. A slight lean to the downside can be linked to data which showed the RICS House Price Balance missed estimates in September. The BoE rate decision wasn’t particularly impactful on Thursday after the Monetary Policy Committee (MPC) opted to hold the cash rate. The accompanying minutes were considered dovish after only one policymaker opted to hike the cash rate immediately. The other policymakers highlighted the lack of inflationary pressures as a reason to hold the cash rate low.

September’s RICS House Price Balance came in at 44% which missed the median market forecast 55%. ‘Unless the stock being sold is replenished there is a limit to how sustainable this modest improvement in market turnover will prove to be,’ Simon Rubinsohn, RICS chief economist, said. ‘Unfortunately, the indications are that we are locked in a cycle where the lack of available properties on agents’ books is itself deterring some potential vendors from thinking about putting their own property on the market.’

The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3575.

EUR/GBP Exchange Rate Predicted to Hold Gains after Dovish BoE Outlook

Despite the fact that European economic data produced yet more disappointing results on Thursday, the single currency rallied versus many of its currency rivals. This is partly as a result of mounting confidence that the European Central Bank (ECB) has plenty of scope to expand quantitative easing should it become necessary. Gains can also be attributed to a confident speech from Greek Prime Minister Alexis Tsipras who stated he can bring the embattled country back to former glory by 2019 once reforms have been successfully implemented.

The shared currency advance has been anchored somewhat, however, thanks to less-than-ideal data from the currency bloc’s most influential nation. August’s German Trade Balance came in at 15.3 billion, a far larger drop than the forecast fall from 25.0 billion to 19.0 billion. German data also showed that the current account, exports and imports all failed to meet with expectations.

The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3543 today.

Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Fluctuate on Central Bank Meeting Minutes

With the European Central Bank set to release interest rate meeting minutes, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to fluctuate over the course of Thursday’s European session. Friday is also likely to see GBP/EUR volatility despite an absence of European economic data. British trade balance data will be of interest to those invested in the Pound Sterling, however.

The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.3630 today.