The Pound Sterling to Euro (GBP/EUR) exchange rate strengthened by around 0.69% on Thursday morning.
After British economic data showed retail sales advanced beyond expectations, the Pound strengthened across the board. Additional gains can be attributed to the difference in tone between the Bank of England (BoE) minutes and the Federal Open Market Committee (FOMC) minutes.
The Euro, meanwhile, edged higher versus a number of major currencies despite mixed economic data which erred towards negativity. The uptrend can be linked to speculation that tonight’s Eurogroup meeting in Riga will see progress made towards Greece unlocking vital bailout funds.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4094.
Pound Sterling (GBP) Exchange Rate Forecast to Advance versus the US Dollar on Divergent Minutes
With the BoE releasing a relatively hawkish set of minutes, and the FOMC publishing comparatively dovish minutes; the Pound strengthened versus its US counterpart.
The British asset rallied versus its most traded rivals on Thursday after domestic data bettered estimates. April’s Retail Sales advanced by 1.2% on the month; eclipsing the median market forecast 0.2% increase. Retail Sales including Auto also rose by 1.2% on the month in April; bettering the market consensus of 0.4% growth in sales.
‘It’s a weather factor,’ an ONS official said. ‘You’ve had warmer than average weather which has led to consumers bringing forward purchases of summer clothing.’
The lower retail prices coupled with negative consumer prices is likely to spur spending which can only be good news for the British economic recovery.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3949 today.
Euro (EUR) Exchange Rate Forecast to Trend within Narrow Range versus the Australian Dollar amid US Dollar Weakness
As the US asset continues to soften in response to dovish FOMC minutes, the shared currency is trending within a narrow range against the ‘Aussie’ (AUD).
European economic data printed poorly, on the whole, but the shared currency edged higher against several assets on Thursday. This can be attributed to speculation that tonight’s Eurogroup meeting in Riga will see Greece come closer to unlocking financial aid. Given that Greece is rapidly running out of time before it runs out of cash, there is greater urgency to bridge gaps in order to avoid insolvency.
Mixed European data wasn’t enough to prevent the single currency appreciation. The German Composite, Manufacturing and Services PMIs all failed to meet with median market forecast figures. In addition, Eurozone Composite and Services PMIs as well as the French Services PMI failed to meet with the respective market consensuses.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Trend Higher ahead of Riga Meeting
As traders wait to see how the critical Eurogroup meeting in Riga pans out, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to continue trending higher. With that being said, however, Eurozone Consumer Confidence data could provoke changes.
Thursday is likely to see GBP/EUR volatility with several data publications pertaining to both the UK and Europe due for release.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.4048 today.