Newsflash – Euro Steady Despite Breakdown of Greek Talks, German Confidence Data
Ahead of a potentially crucial EU summit the Euro was trending in a narrow range against both the Pound and US Dollar.
The common currency managed to hold its own in spite of the latest round of Greek bailout talks ending abruptly and without any progress having been made.
Germany’s GfK Consumer Confidence measure also declined unexpectedly but had little impact on Euro trading.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7133
Both the Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates have experienced a rocky few days of trading thanks to the ongoing negotiations between Greece and its creditors.
Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) Exchange Rate News: Forecasts for Greek Debt Deal Lend Euro Support
With hopes that Greece will strike an 11th hour deal with its creditors (and therefore avoid a default and possible expulsion from the Eurozone) remaining resilient in spite of conflicting reports and social unrest in the Hellenic nation, the Euro was able to post modest gains against several of its peers.
The EUR/GBP, EUR/USD and EUR/AUD exchange rates all advanced during the European session as Greek Prime Minister Alexis Tsipras and other Eurogroup officials gather in Brussels to discuss the situation. The talks have been going on for five months, but there are hopes that real progress could be made this time out.
The reform package presented by Greece on Monday has gone down much better with its creditors than previous versions, but whether the nation’s parliament will actually accept measures like increasing restaurant tax remain to be seen.
As Bloomberg observes; ‘Even if a deal is secured, it may come too late for Greece to receive aid in time for its IMF payment. Germany, the country contributing the most to Greece’s twin bailouts, has insisted that Greek lawmakers take the first step by passing economic-policy changes before the German lower house of parliament will agree to a revised aid deal.’
Tsipras tweeted today; ‘The repeated rejection of equivalent measures by certain institutions never occurred before – neither in Ireland nor Portugal. This odd stance seems to indicate that either there is no interest in an agreement or that special interests are being backed.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast – Pound Moves Away from Four-Week High of 1.41 Despite Bank of England 2015 Interest Rate Hike Comments
With little in the way of UK data to give the Pound a boost, the British asset has spent the week fluctuating fairly modestly against rivals like the US Dollar, Euro and Australian Dollar.
The only UK ecostats released so far have been of low-volatility and printed below expected levels.
The Pound previously advanced to 1.41 against the Euro after Bank of England (BoE) policymaker Martin Weale intimated that investors shouldn’t rule out a 2015 interest rate adjustment, but the pairing soon slipped back to 1.40.
RBS Euro (EUR) Exchange Rate Forecast: Potential ECB Action Could See EUR/GBP, EUR/USD Remain Soft this Year
Although the situation in Greece may be close to resolution, the Royal Bank of Scotland (RBS) has asserted that there are other headwinds driving out of the Eurozone with the potential to have an adverse impact on demand for the common currency this year.
RBS noted; ‘The Euro crisis of 2010-12 may seem to have passed in the markets, but the political and social fallout has been a slower burning problem that may force policymakers in favour of the Euro project to work harder to support growth and prosperity in the region over austerity. This is one factor that may have a longer lasting impact on ECB policy. Already it has shifted to an extreme level of policy easing.’
RBS continued; ‘Fragile politics in the region suggests the ECB will err on the side of spurring growth and take greater risks with inflation over the next three years or more; a recipe for a sustained weaker trend in EUR.’
If the European Central Bank (ECB) sees its current quantitative easing programme to term, or increases it in order to support growth in the currency bloc, the Euro could extend its 2015 declines against the US Dollar and Pound as the year progresses.
EUR/GBP, EUR/USD Exchange Rate Movement Forecast to Be Caused by US GDP, Greece and German Consumer Confidence
While the direction taken by the Euro to Pound Sterling (EUR/GBP) exchange rate in the hours ahead will be largely dictated by news emerging from the emergency Greek summit of Eurozone leaders, the Euro to US Dollar (EUR/USD) pairing could be influenced by today’s US first quarter growth data.
If the pace of contraction is revised, as economists expect to be the case, the US Dollar may gain.
Tomorrow’s GfK German Consumer Confidence Index is also likely to have a modest impact on EUR/GBP and EUR/USD exchange rate trading.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7100, the Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1187 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.4080