Newsflash – GBP/EUR Exchange Rate Surges Beyond 1.39 as UK Wages Rise
Following the publication of the UK’s latest employment numbers, the Pound Sterling to Euro (GBP/EUR) exchange rate jumped.
The news that UK average earnings accelerated by more-than-anticipated was well received by investors and the Pound promptly surged across the board, gaining by more than 1% against the Australian and New Zealand Dollars and advancing 0.5% against the US Dollar.
The Pound Sterling to Euro (GBP/EUR) exchange rate achieved a high of 1.3949
The Pound Sterling to Euro (GBP/EUR) exchange rate surged to 1.39 following the release of the UK’s inflation data and the pairing could hit 1.40 if the UK’s employment figures print in line with forecasts.
Pound Sterling to Euro (GBP/EUR) Exchange Rate News: UK CPI Meets Forecasts, British Pound Climbs as UK Exits Deflation
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced beyond the 1.39 level on Tuesday as the pace of UK inflation climbed to 0.1% from -0.1% in April.
The Bank of England (BoE) had promised that the UK’s flirtation with deflation would be brief and it seems they were right.
British Chambers of Commerce economist David Kern said of the data; ‘Our forecast is that annual inflation will remain around zero over the next 3 or 4 months, before edging up gradually towards the end of the year. Even so, we predict that inflation will still be slightly below the 2% target by the end of next year. This inflation profile suggests that the MPC will not need to consider interest rate rises until the middle of 2016 at the earliest.’
While the Pound initially softened, both the Pound Sterling to Euro (GBP/EUR) and Pound Sterling to US Dollar (GBP/USD) exchange rates went on to gain as the European session progressed.
Falling Eurozone Sentiment, Grexit Concerns Drive Euro to Pound Sterling (EUR/GBP) Exchange Rate Lower, Eurozone Inflation Data Ahead
The Euro to Pound Sterling (EUR/GBP) exchange rate losses were exacerbated as the ZEW economic sentiment reports for both Germany and the Eurozone as a whole declined by more-than-expected.
Declining confidence in the Eurozone’s core was predicted, but the extent of the slide was surprising given the recent run of encouraging ecostats from Germany.
The situation in Greece also weighed on the common currency, with the disintegration in talks increasing the odds of a Grexit and reducing demand for the Euro.
Greek Prime Minister Alexis Tsipras asserted; ‘We are shouldering the dignity of our people, as well as the hopes of the people of Europe. We cannot ignore this responsibility. This is not a matter of ideological stubbornness. This is about democracy.’
Today’s final inflation figures for the Eurozone could have an impact on EUR/GBP exchange rate trading if they differ from previous estimates.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Extend Gains Today if UK Wages Increase or BoE Minutes Contain Interest Rate Hints
Today is likely to be another day of notable Pound Sterling to Euro (GBP/EUR) exchange rate movement as the UK is set to publish both its latest batch of employment figures and minutes from the Bank of England’s (BoE) policy meeting.
The UK’s unemployment rate is expected to hold at a multi-year low while average earnings are tipped to increase.
If wages should climb as expected we may see the GBP/EUR currency pair brush the 1.40 level in the hours ahead. Further gains could be accrued if the BoE meeting minutes show that the Monetary Policy Committee (MPC) is close to becoming divided on the subject of when to increase interest rates.
A split vote, while unlikely, would drive the Pound higher still.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3908, the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5645 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7197