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Pound Sterling to Euro (GBP/EUR) Forecast: Exchange Rate Firms as Greece Government to Clash With Troika

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The Pound Sterling to Euro (GBP/EUR) exchange rate remained trading in the 1.33 region on Wednesday.

Greece and Ukraine Weigh on Euro Sentiment

Expectations that Greece will be able to negotiate with its lenders in the Troika took a knock as the new government led by Alexis Tsipras looks set to cause trouble for the EU and as the EU warned Tsipras that Greece must stick to its creditor commitments.

On its first day in power, the SYRIZA-led coalition said it opposed a European Union statement issued in Brussels Tuesday paving the way to additional curbs on the Kremlin over the conflict in Ukraine, and complained it had not been consulted.

The statement in question claimed that all 28 European Union leaders had agreed that Russia was responsible for the rocket attack on the Ukrainian city of Mariupol, which killed 30 people and called for ministers to consider further sanctions against Russia.

A Greek veto would shatter the fragile European consensus over dealing with Russia, potentially robbing SYRIZA of early goodwill as it lobbies for easier terms for Greece’s bailout.

The situation in Ukraine looks set to come to the fore again over the coming days as the EU and USA look set to tighten sanctions. Heavy fighting has escalated in the east of the nation prompting the Kiev based government to approve a resolution that defines Russia as an aggressor state.

More than 5,000 people have been killed in fighting since the rebels seized swathes of the Donetsk and Luhansk regions last April, according to UN estimates. More than a million people have been displaced.

Consumer Confidence Hits 13-Year High in Germany

Further losses for the Euro were restrained however as data released early in the session showed that consumer confidence in the Eurozone’s largest economy climbed to its best level since 2001.

According to GfK its latest confidence index rose to a reading of 9.3, up from the preceding months figure of 9.0 and was better than forecasts for a figure of 8.8.

Falling energy prices and the European Central Banks recent quantitative easing announcement were the main factors for the rise in sentiment.

‘Consumers are noticeably more confident as they enter the New Year and the consumer climate is continuing to improve. Economic and income expectations, as well as the propensity to spend have all increased tangibly,’ said GfK in a statement.

The Pound to Euro exchange rate is forecast to experience movement on Thursday due to the release of the latest Eurozone sentiment and German inflation data.

Euro Exchange Rate News:

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.1339 ,
Euro,,British Pound,0.7472 ,
Euro,,Australian Dollar,1.4233 ,
Euro,,Canadian Dollar,1.4115 ,

As of 16:10 pm GMT