The Euro to Pound Sterling (EUR/GBP) exchange rate strengthened by around 0.44% on Tuesday afternoon.
After the German business daily Handelsblatt reported that the European Central Bank (ECB) is considering withdrawing from the troika of financial lenders, the Euro edged higher versus most of its major peers. This is because the nation is more likely to reach an accord with the ECB so it would ease pressure on Greece’s debt crisis.
The Pound Sterling, meanwhile, is generally trending higher versus most of its major peers as a result of better-than-expected construction data. However, the gains have been somewhat laboured thus far with the forthcoming general election forcing caution amid political uncertainties.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7580.
Euro (EUR) Exchange Rate Strengthens as Grexit Fears Ease
As explained above, the potential for an end to the ‘Troika’ of financial lenders caused the Euro to strengthen versus many of its major peers. ‘The ECB will use the chance to exit,’ Handelsblatt quoted a German government source as saying. After having refused a troika investigation in Athens, the Greek Prime Minister appealed to the ECB for a lifeline. The ECB will have greater control over the deal should the troika disband.
‘We’re not going to ask for any more loans,’ Finance Minister Yanis Varoufakis said after meeting his French counterpart, Michel Sapin. ‘During this period, it is perfectly possible in conjunction with the ECB to establish the liquidity provisions that are necessary.’
‘We need time to breathe and create our own medium-term recovery program,’ Prime Minister Tsipras said in a statement e-mailed to Bloomberg News on Saturday. ‘Despite the fact that there are differences in perspective, I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole.’
The Euro to Pound Sterling (EUR/GBP) exchange rate dropped to a low today of 0.7532.
Pound Sterling (GBP) Exchange Rate Edges Higher on Positive Data
The British Construction PMI was forecast to decline from 57.6 to 57.0, but the actual result eclipsed expectations and advanced to 59.1. David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said; ‘After the disappointing end to last year and the drop in the industry’s fortunes, the construction sector has had a perky start with good activity across all sectors. Though the month’s activity was well below the highs of the peak recovery months, the modest increase in growth may beat away any wider concerns around an unsustained improvement in the sector’s fortunes.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Hold Steady
Despite the fact that European data printed disappointingly on Tuesday, the Euro is maintaining gains thanks to easing Greek tensions. Therefore, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to hold steady for the remainder of Tuesday.
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced to a high today of 0.7560.
