The Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates remained buoyant in the first half of Thursday’s European session despite Germany’s final Consumer Price Index (CPI) slipping below initial forecasts to -0.4% on the year in January
Eurozone Industrial Production is still to come and could bolster the Single Currency further if favourable.
Earlier… The Euro to Pound Sterling and Euro to US Dollar (EUR/GBP) declined in the second half of Wednesday’s trading as negotiations regarding Greece’s debt repayments continued.
Earlier… The Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates were trending in a narrow range on Wednesday ahead of European Central Bank (ECB) statements and a Eurozone Finance Ministers meeting to discuss Greece.
Yesterday saw the Pound Sterling remain relatively buoyant after UK Manufacturing Production remained above forecasts at 2.4%, a slip from 3.0%.
Earlier… The Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates softened on Tuesday as Greek negotiations continued.
The Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates took an upswing in the second half of Monday’s trading after suffering severe fluctuations throughout the day on fears of a Greek exit from the Eurozone.
The Euro to Pound Sterling (EUR/GBP) exchange rate dropped earlier in Monday’s session as bets that a Greek exit could occur increased–however, as the day continued markets have been reassured by Greek Prime Minister Alexis Tsipras’ tone.
Reporter Marko Deimizi commented: ‘The prime minister’s comments were in a different vein to what we have been hearing [from within and without Greece]. It is clear he wants a solution. Perhaps he knows something that no one else knows?’
The Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates recorded losses during Monday’s European trading despite positive data emerging from the Eurozone.
Germany’s Trade Balance figure reached a record high in December, rising to 21.8B from 17.9B. Economists had forecast a dip to 16.0B.
In addition, Sentix’s Eurozone investor confidence jumped from 0.9 in January to an impressive 12.4 in February—a nine-month high.
Grexit Possibility Pressures Euro (EUR) Exchange Rate Lower
However, other factors weighed heavily on the Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates, particularly fears of a Greek exit from the Eurozone. The current Greek negotiations could cause massive Euro volatility in the near future as hard decisions have to be made.
UK politics are also heating up as we draw closer to May’s general election and the Pound is forecast to experience volatility as a result of any political developments. However, the potential loss of Greece from the Eurozone also doesn’t bode well for the UK government as we close in on voting day.
UK Prime Minister David Cameron stated: ‘It is not saying that anyone thinks it is going to happen, but it is right that they have a look at the risk of Greece leaving the Eurozone. That would create real instability.’
If anything can move markets quickly and dramatically, it’s instability.
Meanwhile, Bank of England (BoE) Governor Mark Carney spoke on Monday ahead of Thursday’s inflation report. At present, economists are forecasting a dip into negative inflation figures as the price of oil continues to fall.
HSBC economist Simon Wells commented: ‘Beyond 2015, inflation should bounce back as the impact of cheaper oil drops out of the annual comparison and –given faster growth—is it possible the MPC [Monetary Policy Committee] will nudge up its initial inflation forecast for 2017.’
The US Dollar could be in for some significant movement on Thursday when the US Advance Retail Sales figure emerges. December is expected to see a -0.5% contraction after November’s -0.9% decline.
The influential US data will continue on Friday with the February University of Michigan Confidence figure. The index is expected to witness a slight improvement from 98.1 to 98.2.
Euro to US Dollar (EUR/USD) and Pound Sterling (EUR/GBP) Exchange Rate Forecast
The Euro could have a major day of fluctuations on Friday when fourth quarter Gross Domestic Product (GDP) figures for both Germany and Eurozone surface. Any favourable data could see the Euro to Pound Sterling (EUR/GBP) and Euro to US Dollar (EUR/USD) exchange rates rally.
The Euro to US Dollar (EUR/USD) exchange rate is residing in the region of 1.1283. The Euro to Pound Sterling (EUR/GBP) exchange rate is trading at 0.7420.
