The Pound Sterling to Euro (GBP/EUR) exchange rate edged higher by around 0.25% on Tuesday morning.
Having improved from -0.4% to 0.2%, BRC Sales Like-For-Like data caused the Pound to strengthen versus the majority of its most traded currency rivals. The gains have been fractional, however, as traders await several UK data publications due later on Tuesday morning.
The Euro, meanwhile, is trending lower versus the majority of its most traded currency peers as a result of continued anxieties regarding the future of Greece. With speculation mounting that the anti-austerity Greek government will force an exit from the Eurozone, the single currency is unlikely to make any solid games until more is known.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3468.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate declined by around -0.34% on Monday morning.
The single currency strengthened versus many of its major peers after European economic data came in higher than expected. The advance has been somewhat sluggish, however, with the black cloud of a potential Grexit looming overhead.
The Pound Sterling, meanwhile, is generally edging lower versus the majority of its most traded currency rivals after Bank of England (BoE) Governor Mark Carney admitted that he was worried about global reform fatigue. However, he did intimate that the UK’s recovery would be encouraged by better wage growth.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3422.
Pound Sterling (GBP) Exchange Rate Edges Lower on Cut Inflation Forecast
A few days before the BoE is due to release its inflation report, many economists predict that the central bank will cut its inflation rate forecast. This is in reaction to inflation recently equalling a record low when it fell to 0.5%.
However, Carney was positive about British wages and the possibility for a sustainable recovery. ‘In the UK we’ve had a lot of job creation, not a lot of productivity, but a lot of job creation and relatively muted wage performance,’ Carney said in Istanbul on Monday. ‘We’re just starting to see the turn in wages that we need for a sustainable recovery.’
In the same speech Carney expressed concern about reform fatigue on a global scale. ‘I worry about reform fatigue, not surprisingly, both at the FSB and more generally,’ he said. ‘Most of the toughest reforms are micro reforms that can have big political coalitions against them but have payoffs far off into the future.’
The Pound Sterling to Euro (GBP/EUR) exchange rate has dropped to a low today of 1.3415.
Euro (EUR) Exchange Rate Advances on Positive Data
Positive European data has caused the shared currency to advance against many of its major peers, despite continued fears regarding a potential Grexit. Germany’s trade surplus was expected to drop from 17.9 billion to 16.0 billion Euros, but the actual result reached 21.8 billion.
In addition, Eurozone Investor Confidence bettered the median market forecast of a rise from 0.9 to 3.0, with the actual result surging to 12.4. This significant improvement in confidence suggests that most investors expect the European Central Bank (ECB) stimulus measures to have a positive effect on the region’s economic recovery.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Losses
With a complete absence of British data to provoke changes, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to hold losses for the remainder of Monday. With that being said, there is the possibility of Euro volatility with the Greek situation bubbling under the surface.
Tuesday will see Sterling fluctuate in response to several notable publications, including the NIESR Gross Domestic Product Estimate for the three months through January. An absence of European data is likely to cause traders to re-focus on geopolitical developments.
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced to a high today of 1.3470.
