The Euro to Pound Sterling (EUR/GBP) exchange rate was trending within a narrow range on Wednesday afternoon.
With a complete absence of British economic data to provoke changes, the Pound softened versus many of its major peers. The declination can be attributed to dampened investor confidence as the forthcoming general election is causing political uncertainty.
The single currency, meanwhile, picked up a little versus many of its major peers after European Central Bank (ECB) President Mario Draghi stated that he is confident that quantitative easing will be fully funded. The advance has been laboured, however, with geopolitical tensions in Greece weighing on demand for the common currency.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7203.
Euro (EUR) Exchange Rate Edges Higher on Confident Draghi
Although the ECB rate decision had minimal impact on Euro movement, the accompanying press conference has seen the shared currency strengthen. President Mario Draghi stated that he is confident that quantitative easing will be fully funded and continue to have a positive effect on the Eurozone’s economic recovery.
The advance has been sluggish, however, with demand still dampened amid geopolitical tensions in Greece. With many fearing that Athens will be unable to provide satisfactory reforms by the April 24th deadline, the potential for Greece to be forced out of the Eurozone is weighing on investor confidence.
The Euro to Pound Sterling (EUR/GBP) exchange rate has fallen to a low of 0.7163 today.
Pound Sterling (GBP) Exchange Rate Edges Lower on Lack of Data
With a distinct lack of British data to provoke Sterling movement, the Pound softened versus most of its major peers. That is not to say that no data automatically leads to declination, but rather there was nothing to curb the downward trend.
The main cause of the Pound’s depreciation is the forthcoming general election, and all the political uncertainties surrounding such a key event. With opinion polls offering varied results, none of which giving any party a clear majority, there is a certain reluctance to invest amid fears of a massive policy overhaul.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Decline
Although the positive comments by Draghi saw the Euro recover fractionally, the advance is likely to be short-lived with the situation in Greece dominating trader focus. Therefore the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to decline over the remainder of the European session.
Thursday will see EUR/GBP volatility dictated by geopolitics once again due to a lack of influential data pertaining to both Europe and the UK.
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced to a high of 0.7217 today.
