The Euro to Pound Sterling (EUR/GBP) exchange rate declined by around -0.22% on Thursday afternoon.
The single currency pared gains from the positive reaction to Greece repaying the International Monetary Fund (IMF) €200 million on time. This was due to renewed fears that Greece will not be granted bailout funds after a Greek government spokesman stated that the Syriza party will not compromise on its promises to its electorate.
The Pound, meanwhile, edged higher versus the majority of its most traded currency rivals despite heightened volatility connected to election jitters. Domestic data had minimal impact on Sterling movement with the forthcoming general election dominating trader focus.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7423.
Euro (EUR) Exchange Rate Forecast to Soften versus its Major Peers amid Concern Greece won’t Secure Bailout Funds
After Greece surprised many analysts by making an IMF payment on time, the single currency appreciated versus most of its major peers. However the gains have been pared somewhat amid renewed fears that Greece won’t be able to secure bailout funds in time to make the next payment to the IMF, due on May 12th.
These fears were stoked by a government spokesman, Gabriel Sakellaridis, who stated that the promises made to the electorate regarding labour and pension issues were not negotiable. ‘We won’t go beyond the limits of our red lines. It’s clear that we cannot cut pensions.’
Aiding the downtrend was mixed results from domestic data. German Factory Orders came in at 1.9% growth annually, meeting the median market estimate. The German Construction PMI dropped from 53.3 to 51.0. The Eurozone Retail PMI advanced from 48.6 to 49.5, but the German Retail PMI softened from 53 to 52.6.
The Euro to Pound Sterling (EUR/GBP) exchange rate has fallen to a low today of 0.7402.
Pound Sterling (GBP) Exchange Rate Forecast to Fluctuate versus its Major Competitors as General Election Stokes Uncertainty
The latest opinion polls show no indication of a clear majority for any party as British citizens submit votes. With the final result not expected until Friday afternoon, however, the Pound is likely to endure considerable volatility.
‘The Pound is very likely to become more volatile during the day,’ said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London. ‘The markets’ eyes will be glued to exit poll releases. If the status quo is maintained in UK politics, the Pound should rally.’
Domestic data had minimal impact on Thursday with trader focus firmly set on the election. On the year, New Car Registrations advanced by 5.1% in April, down from the previous figure of 6.0%.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Tick Lower as Potential Grexit Outweighs Election Jitters
With an absence of domestic data to curb the trend, and with the situation in Greece no closer to resolution, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to continue trending lower. With that being said, however, election volatility could see the Pound fluctuate considerably.
Friday ought to see significant EUR/GBP volatility as traders await the results of the British general election. There will be several European and British economic data publications due which also have the potential to provoke changes for the pairing.
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced to a high today of 0.7483.
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