Euro to Pound Sterling (EUR/GBP) exchange rate volatility is forecast for tomorrow after two days of very muted trading.
The Common Currency spent Monday trending in a narrow range against the Pound as market-moving reports for both the UK and Eurozone were limited.
After closing the European session little changed, the EUR/GBP exchange rate was only moderately affected by the UK’s Mortgage Approvals report on Tuesday.
The Euro to Pound Sterling pairing moved between lows of 0.7904 and highs of 0.7930 before managing to cling to a 0.15% gain.
According to the UK’s Mortgage Approvals figures, the number of people filing successful applications for housing loans rose to a four-month high in June, bypassing estimates for an increase to 63,000 by coming in at 67.196.
This followed a positively revised figure of 62,007 in May.
Other UK figures showed that lending to local businesses declined by 3.4 billion Pounds in June, month-on-month.
However, Sterling came under pressure on Tuesday after the Bank of England’s Deputy Governor, Ben Broadbent, asserted that a testing global climate is restraining the UK’s economic momentum.
While speaking in London Broadbent asserted; ‘If the global economy remains sluggish, it will inevitably be harder for an open economy like the UK to achieve both strong and balanced growth […] Weak growth in the UK’s trading partners, above all the Euro area, has depressed interest and dividend receipts on foreign assets. Equity prices have nonetheless risen everywhere, resulting in net capital gains on a balance sheet that’s slightly long risky assets.’
Broadbent also reiterated the comment issued by the International Monetary Fund yesterday regarding the Pound being slightly overvalued.
However, Broadbent did add; ‘Most important, the UK has in place a hard-won policy framework that didn’t exist when it went through the traumas of the 1976 crisis. This is something which should never be taken for granted.’
The Euro to Pound Sterling (EUR/GBP) exchange rate was slightly stronger after these comments were issued.
In other currency news, the EUR/USD exchange rate was little changed ahead of the release of the US Consumer Confidence Index.
If the measure shows the improvement in sentiment expected, the Euro to US Dollar exchange rate could drift lower during the North American session.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast
Tomorrow any fluctuations in the Euro to Pound Sterling exchange rate are likely to be caused by a stream of economic reports for the Eurozone.
The Eurozone’s Economic Confidence, Industrial Confidence, Services Confidence and Consumer Confidence indexes are all due for release, as are German Consumer Price Inflation figures.
The sentiment measures are, in the main, forecast to show little to no change between June and July.
It is expected that Germany’s Consumer Price Index increased by just 0.2% in July on a month-on-month basis, less than the increase of 0.3% registered in June. If the forecast proves accurate it would add to the case in favour of the European Central Bank bringing in additional quantitative easing style stimulus measures in the foreseeable future.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trading in the region of 0.7912.
Euro Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,Pound Sterling,0.7922,
Euro,,US Dollar,1.3437,
Euro,,Canadian Dollar,1.4519,
Euro,,Australian Dollar,1.4291,
Euro,,New Zealand Dollar,1.5778,
US Dollar,,Euro ,0.7442,
Pound Sterling,,Euro,1.2615,
Canadian Dollar,,Euro,0.6884,
Australian Dollar,,Euro,0.6994,
New Zealand Dollar,,Euro,0.6340,
[/table]
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