The Pound Sterling to Euro (GBP/EUR) exchange rate strengthened by around 0.11% on Friday afternoon.
British construction data produced mixed results on Friday, causing the Pound to remain fairly static versus its most traded currency rivals. A slight appreciation can be attributed to positive sentiment following comments by Bank of England Governor Mark Carney, who hinted that the cash rate will be increased sooner-than-anticipated.
The Euro, meanwhile, is generally trending lower versus most of its major peers due to poor growth results from Greece, which is seen to bolster the government’s view that disparity between Germany and smaller nations is widening.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3510.
Pound Sterling (GBP) Exchange Rate Holding Steady on Construction Output
UK construction data produced mixed results on Friday, which had minimal impact on Sterling movement. Seasonally adjusted Construction Output equalled the median market forecast of a drop from 5.8% to 5.5% on a yearly basis. Month-on-month construction output failed to meet with the market consensus of a rise from -1.8% to 2.7%, with the actual result reaching 0.4%.
‘The outlook seems largely decent for the construction sector in 2015, although it will likely expand at a slower rate than in 2014,’ Howard Archer, an economist at IHS Global Insight said. ‘Meanwhile, prospects still look relatively bright overall for house building, even if the growth rate is unlikely to regain the heady levels seen earlier in 2014.’
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3450 today.
Euro (EUR) Exchange Rate Dips on Greek Growth
Although both German and Eurozone growth eclipsed expectations on Friday, the shared currency edged lower versus the majority of its most traded currency competitors. German Gross Domestic Product saw non-seasonally adjusted preliminary growth of 1.6% in the fourth quarter, bettering estimates of 1.2% growth. Eurozone GDP showed fourth quarter growth of 0.9% on a seasonally adjusted basis, eclipsing the median market forecast of 0.8%.
On the overall performance, Nick Kounis of ABN Amro says he expects more good news to come, writing: ‘We expect the Eurozone to continue to surprise positively in 2015, when we expect GDP growth of 1.6 per cent. This compares to the current consensus of economists, which is 1.1 per cent.’
However, Greece’s growth figures were much less positive, causing concern amongst traders that the Greeks will use this data to highlight the divergence between Germany and other European countries. The preliminary Greek GDP saw fourth quarter growth of 1.7%, failing to meet with expectations of 2.0%.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Gains
With a lack of data to provoke changes, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to continue holding gains for the remainder of Friday. Eurozone trade balance data, due for publication on Monday, could spark changes for the GBP/EUR pairing.
The Pound Sterling to Euro (GBP/EUR) exchange rate reached a high today of 1.3514.
