The Euro to Pound Sterling (EUR/GBP) exchange rate edged higher by around 0.19% on Thursday morning.
After British house price data produced mixed results, the Pound saw little movement as traders await the Bank of England (BoE) rate decision to dictate changes. British trade balance data may also impact upon the Pound.
The Euro, meanwhile, edged higher after German trade surplus eclipsed the median market forecast figure. The gains are unlikely to be sustained, however, with geopolitical tensions in Greece weighing on investor confidence.
The Euro to Pound Sterling 9EUR/GBP) exchange rate is currently trending in the region of 0.7264.
Yesterday…
The Euro to Pound Sterling (EUR/GBP) exchange rate softened by around -0.38% on Wednesday afternoon.
In response to relatively positive domestic data, the Pound strengthened versus many of its major peers. The forthcoming general election and resultant political uncertainties has made the advance somewhat sluggish, however.
The Euro, meanwhile, softened versus many of its most traded currency competitors despite positive data results. This is likely to be in response to fears that Greece will default on its payment to the International Monetary Fund (IMF). The declination has been tempered, however, thanks to allayed Grexit fears after Athens did not actively seek financial aid from Russia.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7273.
Euro (EUR) Exchange Rate Stumbles on Geopolitics
European economic data produced positive results on Wednesday, although it had minimal impact on single currency movement. The German Construction PMI, Eurozone Retail PMI and the German Retail PMI all advanced from previous figures in March.
Fears of a Greek exit from the Eurozone eased somewhat thanks to Athens reassuring investors that it did not ask for financial aid from Russia. ‘We have not asked for financial aid,’ an official said before talks in Moscow between Greek Prime Minister Alexis Tsipras and Russian President Vladimir Putin. ‘We want to solve our debt and financial issues… within the Eurozone.’
‘Greece knows what to do within the EU framework but every country also has the sovereign right to look after and improve its bilateral relations,’ the official added.
The source of the shared currency declination is the expectation that Greece will default on the payment due to the IMF on April 9th. With little known about the consequences of defaulting, traders are showing significant reluctance to invest until more is made clear about the ramifications of a country unable to repay its creditors.
The Euro to Pound Sterling (EUR/GBP) exchange rate has fallen to a low of 0.7269.
Pound Sterling (GBP) Exchange Rate Strengthens on Car Sales
Although March’s New Car Registrations saw growth halve on the year, the monthly advance was the biggest on record. This has been linked to new ’15 number plates which were recently introduced. The latest sales figures show the fourth consecutive month of growth, making the sector one of the drivers behind Britain’s economic recovery.
‘We expect a more stable market over the year ahead,’ said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT). ‘But the fundamentals are still there: there’s still economic confidence, there’s still relatively low interest rates which makes for cheap finance packages . . . and there’s lots of new technology in the cars.’
In addition to the positive car sales data, the Pound appreciation was aided by a report from the Bank of England (BoE) which predicted that mortgage applications would spike in the next three months in response to the last two months of cooling applications.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Hold Losses
With an absence of domestic data to provoke changes, and with the situation in Greece throwing up more questions than answers, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to hold losses for the remainder of Wednesday’s European session.
Thursday ought to see heightened EUR/GBP volatility with several influential domestic data publications due for release. Of particular note will be the BoE interest rate decision and German Trade Balance and Industrial Production.
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced to a high today of 0.7314.
