The Pound Sterling (GBP) has made a loss of -0.5% against the Euro (GBP/EUR) this afternoon, mainly due to an unusually strong Euro (EUR) and a generally negative outlook for the Pound’s prospects.
Conditions Looking Highly Unfavourable for Early 2016 UK Interest Rate Increase
With the Federal Reserve having finally relieved interest rate tensions last year, the eyes of the world are now on Threadneedle Street to estimate just when the Bank of England (BoE) might be raising the UK interest rate.
Although Chancellor George Osborne has recently warned investors that an interest rate hike is imminent, economists have other ideas and in many cases have pushed their forecasts for the decision all the way ahead to 2017. The BoE’s most recent announcement regarding conditions has been that UK saving interest rates are at a new low.
The Pound Sterling to Euro (GBP/EUR) exchange rate has risen by a respectable amount today, although in most of the other GBP little movement has been observed. In a similar situation, the Euro (EUR) has experienced a similar combination of heavy losses and mild gains.
GBP/EUR Exchange Rate News: UK Trade Balance Disappoints Deficit-Watchers
The Pound Sterling (GBP) has hardly redeemed itself in the eyes of investors since yesterday’s abysmal performance, but Sterling has nonetheless printed a few advances against the usual peers. These have included 0.4% against the Euro (GBP/EUR), 0.5% against the Japanese Yen (GBP/JPY) and 0.9% against the Hungarian Forint (GBP/HUF). However, among the Pound’s collection of losses have been -0.5% against the South African Rand (GBP/ZAR), -0.6% against the Indian Rupee (GBP/INR) and -1.2% against the Russian Ruble (GBP/RUB).
The most significant UK economic news today has been the development that the nation’s Trade Balance figures for November have shown a reduction in the size of the deficit in all fields. However, both the Total and Visible categories have failed to fall as low as had been predicted, which is likely the cause of Sterling’s uncertain movement at present.
Euro (EUR) Exchange Rate Unsettled by Disappointing German Contributions Today
The Euro (EUR) has been destabilised from its previous position today by the morning’s impactful German economic releases. These have mainly consisted of Germany’s annual Industrial Production and Trade Balance results for November, which have both fallen on previous figures. Unlike the UK, which is currently managing a deficit, Germany holds a surplus therefore this news has been a double negative to the Germany and by extension, Eurozone, economy.
The Euro has fallen by -0.3% against the Pound Sterling (EUR/GBP) today and has recorded greater losses of -0.9% against the South African Rand (GBP/ZAR) and -1% against the Indian Rupee (GBP/INR).
GBP/EUR Exchange Rate Forecast: BoE Decision and German GDP are Highlights of Coming Week
The UK appeared to have the lion’s share of economic publications in the week to come, although given their nature, this may not work out to the Pound’s (GBP) benefit.
The most notable of these will be Thursday’s Bank of England (BoE) Interest Rate Decision, the first of the New Year. Nobody has predicted a hike, but the Pound’s movement in the immediate aftermath is likely to be decided by the overall dovishness or hawkishness of the BoE’s tone in the simultaneously released minutes.
The weightiest Eurozone printing next week will also come on Thursday and will be comprised of Germany’s non-seasonally adjusted GDP for 2015, as well as the nation’s Public Finances Balance to GDP Ratio. No predictions had been made at the time of writing.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3428 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7448 today.