On Monday, the Pound Sterling to Euro (GBP/EUR) exchange rate dived by around -0.70%. This can be attributed to a combination of trader profit-locking sending the Pound lower, and improved optimism regarding Greece’s future in the Eurozone. The latest proposal submitted by the Hellenic nation has had an initially positive reaction from Eurogroup officials, although there is still much to be ironed out.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3895.
Over the course of the coming week, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to be dominated by geopolitics in Europe. A distinct lack of British data is likely to see the Pound subject to fluctuations in the wider currency market. An abundance of European data is unlikely to be hugely impactful with the situation in Greece overshadowing ecostats.
Towards the end of Friday’s European session, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.4000.
The Pound was trending in a relatively strong position after a succession of positive domestic data publications provoked futures traders to bring forward bets as to the timing of a Bank of England (BoE) benchmark interest hike.
The Euro, conversely, dived after talks between Greek and Eurozone officials broke down, with 5-month of discussions showing no sign of progress towards Greece unlocking aid. In addition, the shared currency slumped after Greek Prime Minister Alexis Tsipras gave a speech in Russia, condemning Europe’s ‘obsession’ with austerity. Furthermore, Tsipras hinted during the speech that if the European Commission does not give bailout funds to the Hellenic nation, they will look to strengthen ties elsewhere.
Pound Sterling (GBP) Exchange Rate Forecast to Fluctuate against the Euro on lack of Data
The British economic docket is particularly sparse over the coming week. This will likely see the Pound fluctuate on wider market movement. However, for those invested in the British asset; CBI Trends Total Orders, CBI Trends Selling Prices, BBA Loans for House Purchase and CBI Reported Sales will be of interest.
Any news from Bank of England officials will also cause Sterling movement. With rate hawks hoping for a rate liftoff before 2016, a hawkish Monetary Policy Committee (MPC) member will likely cause the Pound to rally.
Euro (EUR) Exchange Rate Forecast to Soften versus the UK Pound as Greek Woes Intensify
With deadlines for debt repayment fast-approaching, next week will be key for Greece. Should Monday’s emergency summit fail to see any progress towards Greek bailout, the Hellenic nation is very likely to turn to Russia for help.
Although the situation in Greece is likely to dominate trader focus, there is the potential for domestic data to impact on single currency movement. Eurozone Consumer Confidence, German Manufacturing PMI, German Services PMI, German Composite PMI, Eurozone Manufacturing PMI, Eurozone Services PMI, Eurozone Composite PMI, German IFO Business Climate, German IFO Current Assessment, German IFO Expectations and German Consumer Confidence will be of interest to those trading with the common currency.
If Greece finds it has no choice but to bed with Russia in order to avoid insolvency, the potential ramifications are huge. Not least, it will highlight the Euro’s failings as a way of uniting countries under a common goal.
The combination of accelerated wage growth and low inflation is good news for British consumers. If confidence and purchases increase, the BoE will feel great pressure to increase the lending rate.
In addition to Greek geopolitics weighing on the single currency, it is always worth keeping an eye on developments in Ukraine.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.3955 – 1.4031 during Friday’s European session.