The Euro to Pound Sterling (EUR/GBP) exchange rate softened by around -0.50% on Tuesday morning.
With US officials unhappy about a Greek law that could see a disabled terrorist freed from prison, Russian-based Gazprom heading to Greece to offer financial aid and Athens ordering any spare cash from local governments in the hopes of staying solvent; it is little surprise that the shared currency sunk versus most of its major peers.
The Pound, meanwhile, is generally holding steady versus most of its major rivals thanks to an absence of domestic data to provoke volatility. A fractional declination can be attributed to ongoing trader reluctance to invest heavily with the general election throwing up so many political unknowns.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7173.
Yesterday…
The Euro to Pound Sterling (EUR/GBP) exchange rate cooled by around -0.33% on Monday morning.
With the deadline for Athens to present acceptable reforms fast approaching, many speculate that the cash-strapped nation will not be able to please Eurozone officials and keep their anti-austerity electoral promises. The potential for a Greek exit from the Eurozone, either forced or voluntarily, has caused the single currency to decline significantly.
The Pound, meanwhile, edged lower versus many of its major peers on Monday after domestic data produced mixed results. The main contributing factor to the Sterling downtrend is the forthcoming general election, with political uncertainty seeing traders reluctant to invest for fear of a major policy upheaval.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7199.
Euro (EUR) Exchange Rate Trending Lower on Greek Woes
As mentioned above, heightened speculation that Greece will fail to please both its people and creditors alike has caused the shared currency to decline versus many of its most traded currency rivals.
The Greek government has been given until May 11thto produce reforms that are acceptable to the Eurogroup of Eurozone officials, but many are expecting them to fail given that all of their previous reforms have been rejected. ‘We still do not have a comprehensive, detailed plan,’ one of Greece’s senior-most creditors said here last week. ‘Plus, the numbers just don’t add up.’ The official spoke on the condition of anonymity.
European economic data has printed poorly thus far on Monday, aiding the common currency declination. March’s German Producer Prices declined by -1.7% on the year, failing to meet with the median market forecast of -1.6%. On the month, March’s German Producer Prices came in at 0.1%; once again not managing to meet with the market consensus of 0.2%. February’s Eurozone Construction Output declined by -2.8% on the month, and by -3.7% on the year.
The Euro to Pound Sterling (EUR/GBP) exchange rate has fallen to a low of 0.7189 today.
Pound Sterling (GBP) Exchange Rate Ticks Lower on General Election
British economic data produced mixed results on Monday which caused the Pound to soften versus many of its major peers. April’s Rightmove House Prices advanced by 1.6% on the month; bettering the previous figure of 1.0%. On the year, Rightmove House Prices advanced by 4.7% in April which is slightly down from the previous figure of 5.4%.
‘Hesitation to sell and the use of property as a long-term investment are factors in this month’s new price record,’ said Rightmove director Miles Shipside. ‘As we approach the election, the highest-ever cost of housing sets an interesting challenge for political leaders.’
Additional Sterling declination is as a result of dampened investor confidence with the general election fast-approaching. Concern that the election will lead to a massive policy overhaul, with particular reference to Britain exiting the European Union, has seen increased trader reluctance to buy in British Pounds.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Fluctuate
Given that the European Central Bank (ECB) are due to announce details of quantitative easing purchases, the Euro to Pound Sterling (EUR/GBP) exchange rate has the potential to fluctuate over the course of Monday’s European session. With that being said, however, the heavy-weight troubles in Greece may outweigh positive signs regarding ECB stimulus.
Tuesday is likely to see heightened EUR/GBP volatility with the German ZEW Economic Sentiment Survey due for publication. An absence of British data should see the Pound continue to soften amid political uncertainty.
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced to a high of 0.7226 today.
