GBP/EUR Exchange Rate Holding Steady after Cameron’s Confidence on EU Reforms
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a limited range on Friday afternoon.
Despite a complete absence of domestic data the Pound edged higher versus many of its currency rivals today. The appreciation can be linked to the confidence of Prime Minister David Cameron that he will be able to secure a deal to reform Britain’s relationship with the European Union ahead of the 2017 referendum. Euro-sceptics still believe that the only reforms that Cameron will be able to secure will be minor concessions.
‘There’s still a lot of hard work to be done but there is a path through this. In terms of welfare, no, I haven’t put any other proposals on the table – I have put my four-year proposal on the table and it remains on the table. Nothing is certain in life or in Brussels but there is a pathway to a deal in February,’ he said.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3750.
EUR/GBP Conversion Rate Predicted to Trend Narrowly after Eurozone Current Account Surplus Narrows
In defiance of most analysts’ predictions, the single currency advanced versus most of its peers in the wake of the Federal Reserve interest rate hike. This was due to the fact that the stronger US Dollar should see heightened demand for European exports. ‘There is the potential for a further devaluation in the Euro and that’s the best thing that can happen to the Euro zone,’ said Peter Bofinger, one of the ‘wise men’ that advise the German government on economic policy.
Today’s solitary European data had minimal impact on the currency market but the single currency edged lower in response. October’s Eurozone Current Account saw the surplus narrow on both a seasonally-adjusted and non-seasonally adjusted basis. ‘The Euro area current account surplus declined in October largely due to widening shortfall in secondary income, figures from the European Central Bank showed Friday. The current account surplus decreased to a seasonally adjusted EUR 20.4 billion in October from EUR 30.1 billion in September,’ stated an RTT staff writer.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3708 during Friday’s European session.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Trend Statically ahead of US PMIs
Given the absence of further British and European economic data publications the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to see minimal volatility for the remainder of Friday’s European session. With that being said, the Euro could see changes in response to US Services and Composite PMIs depending on the impact said data has on the US Dollar. If the US Dollar extends gains the Euro could decline, although this will be seen as positive by ECB policymakers looking for a more appropriate EUR/USD trade weight to boost Euro-area exports.
The Pound Sterling to Euro (GBP/EUR) exchange rate reached a high of 1.3811 during Friday’s European session.