The Pound Sterling (GBP) has made a loss of -0.4% against the Euro (GBP/EUR) today, with the potential cause being the ongoing negotiations in Brussels between David Cameron and EU leaders.
‘Emergency Brake’ Introduction could Throw Spanner in the Works
Although EU leaders have proposed an ‘emergency brake’ as an alternative to the 4-year benefits freeze desired by Cameron, the lack of a positive response to this news show that Eurosceptics are understandably wary about the fine print of the planned scheme, as well as the obvious differences between a temporary condition and a ‘blanket’ piece of legislature.
The Pound Sterling (GBP) has made a gain of 0.3% against the Euro (GBP/EUR) this morning, with the only high-impact UK economic announcement of the day coming out positive. This has been the Gfk Consumer Confidence Survey for January, which has risen from 2 points to 4 instead of falling to 1.
Eurozone Inflation Rate Stats due Imminently
The near future will see the release of the Eurozone Consumer Price Indexes for January, which at the time of writing were forecast to rise from 0.2% to 0.4% on the year for the base result and reprint at 0.9% for the core printing.
The Pound Sterling (GBP) has remained strong against the Euro (GBP/EUR) today, despite a situation that had the potential to seriously rattle investor confidences.
Fear or Prudence? Economists Weigh in on Lloyds Public Sale Halting
Although it was eagerly anticipated by a number of investors as well as potential investors, the decision to postpone the sale of public shares for Lloyds Bank has been met with a mixed reception by economists.
According to Hargreaves Landsown Senior Analyst Laith Khalaf, ‘The government are looking to obtain a good price for the remaining 10% of the Lloyds Banking Group they own and timing to get the best value around issues such as the budget, financial and tax year end and Lloyd’s own financial calendar was always going to be tricky’.
The Pound Sterling (GBP) has remained strong at its previous rate against the Euro (GBP/EUR) today, with a potential cause being the development that Google may not have escaped paying the tax it ostensibly owes to the UK.
EU Commissioner Signifies Intent as Google Tax Dominates Discussion
With Chancellor George Osborne now under fire from all sides over calling the recent Google tax agreement ‘a major success’, the UK has nonetheless been granted a reprieve in the form of a statement from European Competition Commissioner Margrethe Vestager, who has indicated that she is prepared to investigate Google’s tax activity if required.
The Pound Sterling to Euro (GBP/EUR) exchange rate has advanced by a healthy amount so far today, with the UK currency making similar sized gains against most of its peers. The Euro’s (EUR) movement has been much less consistent, with declines against rivals being commonplace.
GBP/EUR Exchange Rate News: Initial Optimism from UK GDP Stats may be Short-lived
Pound Sterling (GBP) has managed to snatch gains of 0.5% against the Euro (GBP/EUR), 0.6% against the Qatari Rial (GBP/QAR) and 0.8% against the Japanese Yen (GBP/JPY) today, although these have been tempered by losses of -0.5% against the Australian Dollar (GBP/AUD) and -2.2% against the Russian Ruble (GBP/RUB). These advantageous gains represent decidedly better movements for Sterling compared to yesterday.
Most of Sterling’s positive movement today has been brought about by the recent Q4 UK GDP reports, which have risen from 0.4% to 0.5% on the quarter and shown an expected decline from 2.1% to 1.9% on the year.
While these results have clearly elated investors, the fine print on the stats has been far less encouraging. Construction in the UK is in a state of recession and as IHS Global Insight economist Howard Archer has pointed out, ‘[the GDP result] was completely dependent on the services sector’.
Euro (EUR) Flags as Eurozone Inflation Data Disappoints
The Euro (EUR) has flopped by -0.6% against the Pound Sterling (EUR/GBP) today and has generally put on a poor performance elsewhere. Among the other single currency losses have been -0.7% against the New Zealand Dollar (EUR/NZD) and -1% against the Australian Dollar (EUR/AUD). The only discernible gain has been of 0.3% against the Japanese Yen (EUR/JPY).
Eurozone economic publications have been the cause for the most recent devaluation – although Spain’s Q4 Unemployment Rate fell from 21.18% to 20.9%, Italy saw disappointing movement in its December Wage Inflation and confidence in the Eurozone Economy, Business Climate, Industrial, Services and Consumer areas all fell for the current month.
GBP/EUR Exchange Rate Forecast: German Inflation Rate Stats due this Afternoon, Eurozone CPIs out Tomorrow
The near-future movement of the GBP/EUR exchange rate is likely to be dominated by the Eurozone rather than the UK, given the present distribution of data releases.
This afternoon will see the announcement of the German CPI for January, which has been forecast to rise on the year but fall on the month.
Tomorrow will see further consumer price data out in the form of the morning’s Eurozone Inflation figures for January, which are expected to come out mixed.
The UK’s remaining contributions will be tomorrow morning’s Lloyds Business Barometer for January and Gfk Consumer Confidence Survey for the same month. In the latter field, forecasts are slightly pessimistic.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3145 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7608 today.