EUR/GBP Conversion Rate Predicted to Trend Statically on Geopolitical Uncertainty
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending within a limited range on Thursday afternoon.
In the early stages of Thursday’s European session the shared currency declined versus its major peers in response to mounting European geopolitical uncertainty. After strikes in Greece reignited fears that the embattled Hellenic nation will reject creditor austerity measures, trader sentiment dampened considerably. Adding to uncertainty was news that anti-austerity socialists in Portugal ousted the centre-right government attempting to impose austerity measures. All this feeds into concerns that smaller economies will either opt or be forced to leave the Eurozone.
However, as the European session progressed the Euro recovered early losses thanks to US Dollar weakness. After both US Initial Jobless Claims and Continuing Claims advanced beyond expectations, the resultant US Dollar downtrend supported the Euro thanks to negative correlation.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7081.
GBP/EUR Conversion Rate Predicted to Trend within a Narrow Range on UK Housing Bubble Concerns
After UK data showed that house prices rose beyond expectations, fears that a housing bubble will price out first-time buyers has weighed on Sterling trade. ‘The legacy of the drop in new builds following the onset of the global financial crisis is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month by month basis. Property is set to become more unaffordable going forward, based on five-year projections from RICS’ members for house prices and rent,’ stated RICS chief economist Simon Rubinsohn.
Adding to the absence of Sterling volatility today is uncertainty in the market with the rumbles of Eurozone geopolitical tensions resurfacing. Some traders are concerned that the prospect of a divided Europe will weigh on UK trade and ultimately policymaker confidence.
The Euro to Pound Sterling (EUR/GBP) exchange rate dropped to a low of 0.7038 during Thursday’s European session.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast: Eurozone GDP in Focus
Tomorrow will see the publication of both German and Eurozone Gross Domestic Product for the third-quarter. These figures will be very likely to provoke Euro to Pound Sterling (EUR/GBP) exchange rate movement. British Construction Output data may also impact EUR/GBP volatility.
Later during Friday’s North American session US Advance Retail Sales and University of Michigan Confidence reports will likely cause EUR/GBP fluctuations given EUR/USD negative correlation.
The Euro to Pound Sterling (EUR/GBP) exchange rate climbed to a high of 0.7094 during Thursday’s European session.
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