The Euro to Pound Sterling (EUR/GBP) exchange rate strengthened by around 0.56% on Tuesday morning.
The common currency recovered some of its losses on Tuesday after the reaction to the Syriza victory in Greece was seen as overdone. The new coalition is seen as a force which will tackle anti-austerity but not force a Grexit.
The Pound Sterling, meanwhile, is generally holding steady versus the majority of its most traded rivals as traders await growth data.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7499.
Yesterday…
The Euro to Pound Sterling (EUR/GBP) exchange rate is trending within a tight range on Monday.
After having declined significantly at the news that the anti-austerity party Syriza gained office in Greece, the common currency recovered some of its losses on Monday. This is mostly as a result of trader anxieties easing as the Greek government will be a coalition thanks to Syriza not gaining the desired majority. Aiding the Euro uptrend was better-than-expected data out of Germany.
The Pound Sterling, meanwhile, is generally trending higher versus many of its major peers. This is due to dampened market sentiment increasing demand for the Pound and the UK’s comparatively high interest rate.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7477.
Euro (EUR) Exchange Rate Gains on Syriza Coalition
In the immediate aftermath of the Greek vote, which saw anti-austerity political party Syriza victorious, the shared currency slumped across the board. With the recent European Central Bank (ECB) intervention, which will see €1.1 trillion pumped into the Eurozone, the single currency endured its largest fall since 2003.
However, traders have pared back Euro losses amid fears that the declination was overdone. This especially rings true considering that Syriza has not gained full power, and have already agreed a coalition with the Independent Greeks. Most agree that the likelihood of a Grexit is significantly reduced with a coalition presiding over policy.
New Prime Minister Alexis Tsipras stated; ‘Greece is turning a page, it’s leaving behind five years of humiliation and misery. . . We are putting together a government of social deliverance to carry out our programme and negotiate with Europe.’
Data out of Germany printed positively, allowing the shared currency to extend gains. Business Climate, Current Assessment and Expectations data all advanced from previous figures.
The Euro to Pound Sterling (EUR/GBP) exchange rate has fallen to a low today of 0.7424.
Pound Sterling (GBP) Exchange Rate Trending Higher on Consumer Spending
Although the UK economy has seen cooling growth of late, with inflation threatening to fall below 0, the prospect of improvement in the Eurozone is good for Britain. The Pound, therefore, strengthened versus many of its most traded currency rivals on Monday.
‘For the UK, the best thing the ECB could have done is exactly what they did,’ said Rob Wood, an economist at Berenberg Bank. ‘A stronger Eurozone economy should feed through to the UK and make rate hikes a more reasonable proposition.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Trend within Tight Range
With little known about how a Greek coalition government will affect the Eurozone, and with an absence of data to provoke significant changes, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to trend within a tight range on Monday.
The Euro to Pound Sterling (EUR/GBP) exchange rate reached a high today of 0.7504.
