The Pound Sterling to Euro (GBP/EUR) exchange rate began Thursday’s European session trending lower as investors speculated that Greece was close to an austerity deal, while the Pound Sterling to US Dollar (GBP/USD) exchange rate advanced ahead of UK Gross Domestic Product (GDP) stats.
Greek Optimism Dented after German Finance Minister Announces Talks haven’t Come Very Far – Euro (EUR) Exchange Rate Sensitive
After Wednesday’s Greek optimism regarding the situation with creditors, Germany’s finance minister said he was ‘surprised’ that the nation was announcing a deal was close.
German finance minister Wolfgang Schaueble stated: ‘Negotiations between the three institutions and the Greek government still haven’t come very far… [I’m] always a bit surprised that it’s always said in Athens that we stand near an agreement.’
Wednesday saw Greek Prime Minister Alexis Tsipras state that the nation was close to a deal, a move that saw the Euro (EUR) exchange rate climb. However, not everyone agrees with the optimism from the struggling nation.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending lower at the start of Wednesday’s trading as Greek talks continued before the June deadline which the Syriza government has said will see the nation run out of money.
The situation has progressed very slowly and the Euro (EUR) exchange rate has been softer as a result.
European Commission’s Juncker Accuses Varoufakis for Delay in Talks
European commission president Jean-Claude Juncker has reportedly commented on Greek finance minister Yanis Varoufakis, suggesting he’s been of little help throughout the negotiations.
Juncker is reported to have said: ‘He is not helping the process. Mr Varoufakis is the finance minister of a country that has to confront huge problems and he doesn’t give the feeling that he knows that.’
Earlier… The Pound Sterling to Euro (GBP/EUR) exchange rate is likely to be in for some major market movement in the week ahead as Greek government claims it’s optimistic about a deal and UK GDP stats are due out.
UPDATE: The Pound Sterling to Euro (GBP/EUR) exchange rate climbed in the first part of Tuesday’s European trading ahead of UK CBI Reported Sales and the Euro was hit by nerves surrounding Greece’s austerity deal.
US Durable Goods Orders Supports US Dollar (USD) Exchange Rate
The Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates were both trending lower as Tuesday’s European session continued after US Durable Goods Orders Excluding Transportation beat forecasts and came in at 0.5% in April rather than the 0.3% forecast. Additionally, the headline US Durable Goods Orders stat contracted by the -0.5% economists had forecast, but the March figure was positively revised to 5.1%.
Euro Hits One-Month Low Versus US Dollar (EUR/USD) as Greek Bailout Fears Rise
The Euro to US Dollar (EUR/USD) exchange rate hit lows of $1.0909 on Tuesday, the lowest it’s been since April, as Greek uncertainty clouded the market.
Currency strategist Kit Juckes commented: ‘The Greek government will need some form of deal in order to release further funds if it is to avoid missing payments to the IMF in June. Whether Greek PM Tsipras can negotiate a deal that is acceptable to enough MPs of his party isn’t clear and markets are once again, very edgy.’
Greek Negotiations Forecast to Cause Euro to Pound Sterling (EUR/GBP) Exchange Rate Fluctuations
The situation between Greece and its creditors began in January when left-wing political party Syriza was voted into power. However, despite causing major Euro to Pound Sterling (EUR/GBP) exchange rate fluctuations along the way, there have been few substantial steps made.
That being said, Greek Prime Minister Alexis Tsipras gave a shining speech of optimism on Friday, suggesting that a deal between Greece and its creditors was on the horizon.
Tsipras commented: ‘Discussions last night with Chancellor Angela Merkel and President Francois Hollande were constructive and [held] in a very good and friendly atmosphere. I am optimistic that we can soon arrive at a stable, long-term and viable solutions with the mistakes of the past – and that Greece will return with cohesiveness to growth. I am optimistic.’
With little Eurozone domestic data of influence hitting the market next week, it’s likely that Grexit fears will dominate a lot of the EUR/GBP exchange rates movement.
There are a few pieces of data worth mentioning for the week ahead such as Tuesday’s UK CBI Reported Sales followed by Wednesday’s more influential German GfK Consumer Confidence Survey for June.
Additionally, final Eurozone Economic Confidence, Industrial Confidence, Services Confidence and Consumer Confidence figures will also emerge on Thursday and could impact the Euro (EUR) exchange rate somewhat if out of line with initial forecasts.
UK GDP Forecast to Cause Major Pound Sterling to Euro GBP/EUR Exchange Rate Swings
The Pound Sterling to Euro (GBP/EUR) exchange rate could experience some movement from UK BBA Loans for House Purchase data which will be out on Thursday ahead of a highly influential day on Friday. The UK’s Gross Domestic Product (GDP) ecostat is to be published and could be a major source of Pound Sterling to Euro (GBP/EUR) exchange rate fluctuations.
Italian GDP is also scheduled to be published on Friday and will close the week for Eurozone data.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trading at 0.7075; the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4134.