The Euro to Pound Sterling (EUR/GBP) exchange rate was trending within a tight range on Monday afternoon.
After British economic data failed to impress, the Pound softened versus many of its major peers. Accelerating the downtrend is mounting political uncertainty as the general election draws ever closer.
The shared currency ticked higher thanks to positive German data. The advance has been slow, however, as the geopolitical upheaval in Greece is still weighing on optimism. The European Central Bank (ECB) will announce its asset purchases later on Monday but most expect little to change with quantitative easing still in its infancy.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7165.
Euro (EUR) Exchange Rate Ticks Higher on German Data
In response to relatively positive German data, the common currency edged higher versus many of its most traded currency competitors. March’s German Import Price Index declined by -1.4% on the year, avoiding the median market forecast declination of -2.0%. On a monthly basis, March’s Import Price Index gained by 1.0%; eclipsing the market consensus of a rise of 0.4%.
The advance has been sluggish, however, as a result of traders awaiting the ECB asset purchase announcement. Whilst many don’t feel that the institution will look to alter the program of quantitative easing at this early stage, there is a faint possibility that there will be a reduction in the amount of bonds purchased given that QE has already had a positive effect.
The Euro to Pound Sterling (EUR/GBP) exchange rate has fallen to a low of 0.7148 today.
Pound Sterling (GBP) Exchange Rate Softens on Poor Data
British economic data printed disappointingly on Monday, which caused the Pound to soften versus the majority of its most traded currency rivals. The Confederation of British Industry’s Business Optimism measure was forecast to gain from 15 to 19 in April, but the actual result saw a sizeable drop to only 3. Trends Selling Prices declined beyond the median market forecast of a drop from 4 to 2, with the actual result falling to 13. In addition, Trends Total Orders was expected to advance from 0 to 4, but the actual result only posted a gain to 1.
Katja Hall, the CBI’s deputy director general, said: ‘Exports keep dragging at the heels of growth: firms are finding the recent rise in the Pound against the Euro challenging, making them less competitive in Europe, while the unravelling situation in Greece is creating uncertainty. Among the measures business wants in the first 100 days of a new government, an ambitious, long-term export strategy must be a central element to keep growth on course.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Fluctuate
With the ECB preparing to announce asset purchases, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to fluctuate over the course of Monday’s European session. Both the Pound and the Euro have already seen pressures from Greece and the general election priced-in to a large extent.
Tuesday will be significant for those invested in the Pound with first-quarter Gross Domestic Product data due for publication. A complete absence of European data on Tuesday will likely see geopolitics driving changes for the common currency.
The Euro to Pound Sterling (EUR/GBP) exchange rate climbed to a high of 0.7171 today.
