Greek Discussions Delayed until Sunday – Euro Trending Higher
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped from 1.41 to 1.39 on Wednesday as Greece was given until Sunday to come to terms with creditors.
This delay in proceedings won’t help the Greek populace, but it will give the government more time to come up with acceptable proposals. The Euro also edged slightly higher against the US Dollar.
GBP/EUR Holds 1.41 after UK Growth Data
Although the UK’s industrial production report impressed, the nation’s manufacturing production numbers fell short of forecasts. However, the GBP/EUR exchange rate remained trending above the 1.41 level as investors focused on today’s Greek crisis talks.
The UK GDP estimate for June failed to have much impact on the currency pair despite showing expansion of 0.7%.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Pares Initial Gain as Varoufakis Resigns
The news that Greek Finance Minister Yanis Varoufakis resigned his post helped the Euro recover losses on Monday as it was hoped that negotiations might progress more swiftly without him butting heads with lenders.
The Euro was also modestly supported by Germany’s Factory Orders report, which printed at -0.2% on the month (rather than -0.4%) and 4.7% on the year, beating expectations for an annual reading of 3.8%.
The Eurozone’s Sentix Investor Confidence gauge also improved on forecasts by showing a surprising increase in sentiment.
Despite this, the Pound Sterling to Euro (GBP/EUR) exchange rate still advanced back towards the 1.41 level.
The outcome of the hotly-anticipated Greek referendum saw the Pound Sterling to Euro (GBP/EUR) exchange rate jump from 1.4109 to 1.4175 and investors are predicting that the pairing could advance back to a seven year highs in the days ahead.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Return to 1.43 This Week, Grexit Fears Grow after ‘No’ Victory
At the beginning of last week the Pound Sterling to Euro (GBP/EUR) exchange rate surged to a fresh seven-year high of 1.43 in response to the news that Greece was to hold a referendum which could effectively decide the nation’s future in the currency bloc.
Although the nation then called an emergency week-long bank holiday, imposed capital controls and missed its repayment to the International Monetary Fund (IMF), the Euro actually recouped losses over the course of the week.
The GBP/EUR exchange rate returned to 1.40 as the Bank of England’s (BoE) chief economist hinted that interest rate cuts could be on the horizon and the UK’s Manufacturing PMI fell short.
Before the weekend the Pound edged slightly higher thanks to upbeat Services data, but investors remained on the fence ahead of Sunday’s vote.
Expert Reaction to the Greek Referendum – Greece Backs Tsipras and Votes against Austerity, EUR/GBP, EUR/USD Exchange Rate Movement Predicted
Although polls conducted throughout last week indicated that voters were split nearly 50/50 on whether to support or reject the austerity measures put forward by creditors, the result turned out to be much more decisive than that.
Before the final votes were counted, the ballots appeared split 68% against austerity and 32% for.
Greek Prime Minister Alexis Tsipras asserted; ‘Today we celebrate the victory of democracy, but tomorrow all together we continue and complete a national effort for exiting this crisis.’
While Tsipras has claimed that a no outcome will give him more leeway to negotiate with creditors, officials from the European Commission have intimated that the Greek populace voting no will be taken as confirmation that the nation no longer wants to be part of the Eurozone.
So what next? Will there be a Grexit?
Industry expert Mark Lowen stated; ‘The partying by the “No” camp will go well into the night here and the government will be popping open the ouzo. Alexis Tsipras has called the Eurozone’s bluff – and it appears to have gone his way. But the triumphalism won’t last. There is still a sizeable chunk of the Greek nation deeply unhappy with what has happened. And the government will have to unite a divided country. More than that, a deal with the Eurozone has to be struck fast. Greek banks are running critically low and will need another injection of emergency funds from the European Central Bank.’
However, given the less than complimentary remarks levelled by Tsipras and Greek Finance Minister Yanis Varoufakis in recent weeks, negotiations are likely to be stilted at best.
How the situation progresses over the next few days will be hard to predict, but one thing’s for certain – the Euro is likely to experience extensive volatility.
As investors digest this latest development in the Greek bailout saga, both the Pound Sterling to Euro (GBP/EUR) and US Dollar to Euro (USD/EUR) exchange rates are likely to experience notable volatility.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: Eurozone Investor Confidence, BoE Interest Rate Decision Ahead, FOMC Minutes Could Impact Currency Trading
The situation with Greece will continue to be the main cause of currency market movement this week, but there are some economic releases with the potential to cause Pound Sterling to Euro (GBP/EUR) exchange rate fluctuations.
On Monday there is little in the way of UK news, but the Eurozone is set to publish Retail PMI and the region’s Sentix Investor Confidence gauge.
Given recent events confidence in the currency bloc is likely to have fallen and such a result is unlikely to have much of a positive impact on Euro trading.
Other events to watch out for this week include the Bank of England’s (BoE) interest rate announcement and the publication of minutes from the last Federal Open Market Committee (FOMC) policy meeting.
Current Pound (GBP), Euro (EUR) Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1,4142 the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7057