The Pound Sterling to Euro (GBP/EUR) exchange rate declined in Tuesday’s European session after UK Gross Domestic Product (GDP) ecostats posted growth from 2.6% to 2.7% in the fourth quarter of 2014.
Economists had forecast 2.8% growth and therefore the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to continue softening.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Climbs on BoE Interest Rate Comments
Earlier… The Pound Sterling to Euro (GBP/EUR) exchange rate gained some stability after Bank of England (BoE) Monetray Policy Committee (MPC) member Kristin Forbes stated that UK interest rates could be on the cards in the near future if UK inflation rebounds.
Forbes stated: ‘I think there is a chance that inflation will pick up faster than people had been expecting in the medium term, which then would most likely merit an increase in interest rates sooner than people are currently expecting.’
The statement by Forbes offered hope to investors who had priced interest rate rises out until 2016 after the recent unanimous Monetary Policy Committee (MPC) vote.
Pound Sterling to Euro (GBP/EUR) Forecast to Gain after Syriza Win
The Pound Sterling to Euro (GBP/EUR) could gain during Monday’s trading as the Euro hit an 11-year low versus the US Dollar (EUR/USD) over the weekend after Sunday’s Greek vote.
The possibility of a Greek exit (Grexit) is likely to weigh on the Euro for some time as negotiations commence.
HSBC strategist Ben Pedley stated: ‘What we do this this outcome brings is once again volatility back to the fore. We think Greek exit is a very, very low probability or possibility.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Jumps on Syriza Victory
On Sunday the Pound Sterling to Euro (GBP/EUR) exchange rate climbed above the 1.34 level as anti-austerity party Syriza snatched victory from the New Democrats.
The repercussions from this event will continue to be felt on Monday, but investors will also be taking an interest in the UK’s BBA Loans for House Purchase figures and Germany’s IFO Business Climate/Conditions reports.
GBP/EUR Exchange Rate Forecast
The Pound Sterling to Euro (GBP/EUR) exchange rate could have an extremely interesting week ahead with the release of some highly influential data.
Reports to look out for include; German and Eurozone Unemployment Rate, Unemployment Change, Consumer Price Indexes as well as UK Gross Domestic Product (GDP) stats.
The Pound Sterling exchange rate could fluctuate moderately on Monday when German IFO Business Climate stats emerge. In December the ecostat resided at 105.5 and any additional increases to the index could potentially offer the Euro some strength.
Meanwhile, the UK will publish BBA Loans for House Purchase stats on Monday which could offer the Pound Sterling some support if favourable German figures emerge.
UK Gross Domestic Product (GDP) ecostats are due for publication on Tuesday and could be massively influential for the Pound Sterling to Euro (GBP/EUR) exchange rate. UK GDP resided at 2.6% in the third quarter of 2014 and any improvement could see Sterling rally.
Furthermore, Tuesday is devoid of Euro data leaving the Pound Sterling to Euro (GBP/EUR) exchange rate free to rally significantly without challenge.
However, German Consumer Confidence could help the Euro on Wednesday. January recorded 9 index points and there’s potential for growth as confidence in the currency bloc’s largest economy seems to have remained buoyant despite deteriorating Eurozone circumstances.
Thursday is likely to be the most powerful day for Euro movement when German Unemployment Change, Unemployment Rate, and Consumer Price Index (CPI) ecostats emerge. The German Unemployment rate resided at 6.5% in December and any fall in joblessness has the potential to allow a Euro rally.
German inflation stats could be a major influence for Euro trading with inflation falling in many nations across the world due to cheaper oil prices.
Friday will keep the heavy data flow going with the release of Eurozone Unemployment Rate and Consumer Price Index.
However, after the European Central Bank (ECB) announced it would begin to purchase sovereign bonds in March, any additional speculation or statements from the ECB could pressure the Euro lower.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3311 on Friday with market movement of +0.65%.
UK GfK Consumer Confidence figures are out on Friday and could be of moderate influence to the Pound Sterling to Euro (GBP/EUR) exchange rate.
German Unemployment Rate and Consumer Price Index stats can be used as an indicator for Eurozone health as a whole and therefore might offer a sneak insight into Friday’s Eurozone ecostats. Any favourable inflation or unemployment data could see the Euro to Pound Sterling (EUR/GBP) exchange rate rally.