The Euro to Pound Sterling (EUR/GBP) exchange rate was holding steady on Wednesday despite Greek election concerns.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Trending in Narrow Range before UK Trade Data
Although the news that Greece will be holding a snap election next week saw Greek stocks plummet, the Euro proved resilient and the Euro to Pound Sterling (EUR/GBP) exchange rate began European trading in a stronger position.
However, some EUR/GBP declines could be recorded later today if the UK’s trade deficit narrows in line with expectations.
Earlier…
The Euro to Pound Sterling (EUR/GBP) exchange rate gained on Tuesday in response to Germany’s trade balance report.
EUR/GBP Exchange Rate Climbs 0.3%
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced to a high of 0.7895 during the European session as investors responded positively to better-than-forecast export data for Germany.
It had been forecast that the level of exports in the Eurozone’s largest economy would fall by -1.7% on a month-on-month basis in October, but they only declined by -0.5%.
Weaker domestic demand and the slide in oil prices saw imports fall by -3.1% on the month, leaving Germany with a trade surplus of 21.9 billion Euros – much stronger than the surplus of 18.9 billion Euros anticipated.
The uptrend in the Euro to Pound Sterling (EUR/GBP) exchange rate was aided by the UK’s below-forecast industrial production and manufacturing production reports.
Earlier…
The Euro to Pound Sterling (EUR/GBP) exchange rate fell to a low of 0.7854 on Monday as the Pound was bolstered by an improvement in UK confidence.
EUR/GBP Exchange Rate Struggles after German Data
On Monday the Euro lost ground against its British counterpart as domestic data fell short.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed by roughly 0.4%, achieving a high of 1.2734 during the European session.
Sterling strengthened against several of its rivals as the UK released its Lloyds Employment Confidence Index.
The gauge of sentiment rallied from 0 to 1 – a modest increase but still a step in the right direction.
Meanwhile, demand for the Euro was undermined by Germany’s Industrial Production stats fell short.
Industrial production in the Eurozone’s largest economy had been forecast to increase by 0.4% in October on a month-on-month basis, but it only climbed by 0.2%. On the year, industrial production was 0.8% higher in October, an improvement on the previous month’s figure but less than the 0.9% anticipated.
According to the New Zealand Herald; ‘The Economy Ministry said Monday that the month-on-month increase followed a 1.1 percent rise in September. That was revised downward from an initial reading of 1.4 percent. The production figures come after official data on Friday showed a much larger-than-expected increase in factory orders in October, when they rose 2.5 percent compared with the previous month in a promising sign for fourth-quarter economic growth. Germany’s economy contracted slightly in the second quarter but avoided recession with meager 0.1 percent growth in the third quarter.’
Euro losses were a little limited as the Eurozone’s Sentix Investor Confidence Index for December jumped from -11.9 to -2.5. A reading of -9 had been predicted.
BoE says UK Could Cope with Rate Increases, Pound Sterling (GBP) Climbs
The Pound was also supported as a report published by the Bank of England (BoE) indicated that British households will be able to stand up against interest rate increases when they do eventually materialise.
A survey geared towards British consumers showed that increased spending by savers would offset the impact of borrowers reducing their outlay once interest rates are hiked.
According to the BoE; ‘These results do not imply that increases in interest rates from their current historically low level would have unusually large effects on household spending. The outlook for household income is a key factor that will determine the vulnerability of households to a rise in interest rates.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast
Speeches by the Bank of England’s Martin Weale and Andrew Gracie could cause further movement in the Pound Sterling to Euro exchange rate in the hours ahead.
Any dovish remarks could weigh on the Pound while hawkish remarks would bolster the British currency.
The Euro to Pound Sterling (EUR/GBP) exchange rate is likely to experience volatility tomorrow as Germany publishes its trade data for October and the UK releases Industrial/Manufacturing production reports.
Pound Sterling (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.5589,
Pound Sterling,,Euro,1.2724,
Pound Sterling,,Australian Dollar,1.8799,
Pound Sterling,,New Zealand Dollar,2.0399,
US Dollar,,Pound Sterling,0.6416,
Euro,,Pound Sterling,0.7856,
Australian Dollar,,Pound Sterling,0.5318,
New Zealand Dollar,,Pound Sterling,0.4898,
[/table]
