Pound Sterling to Euro (GBP/EUR) Exchange Rate Fluctuates after Eurozone Data
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced steadily over the course of Wednesday as UK Services PMI impressed and the European Central Bank adopted a hard line with Greece.
The pairing climbed from 1.32 to briefly breach the 1.34 level and held gains overnight.
However, prior to the Bank of England’s interest rate announcement the Pound softened slightly against the Euro as a result of Germany publishing an impressive Factory Orders report.
Orders were shown to have surged by a whopping 4.2% on the month in December, over double the 1.5% increase expected.
Euro gains were limited by less impressive Construction and Retail PMI’s for the Eurozone and its largest economies.
Further developments in the Greece situation could weigh on the Euro in the hours ahead.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3375
Earlier…
GBP/EUR Exchange Rate Trending Higher
An impressive UK Services PMI gave the Pound a boost on Wednesday and the GBP/EUR pairing gained by 0.8%.
According to Markit; ‘The UK service sector started 2015 in a strong fashion as activity and new business both increased at accelerated and above survey average rates. Companies were suitably encouraged by these trends to hire additional staff at the joint second-fastest rate in the survey history, using their additional capacity to try and clear backlogs and prepare for further business expansion in the coming months.’
The index surged from 55.8 to 57.2.
In the immediate aftermath of the data release the Pound Sterling to Euro (GBP/EUR) exchange rate advanced to a high of 1.3254 before steadily climbing all the way to 1.3355.
The GBP/EUR pairing held its gain even as the Eurozone’s retail sales report surprised to the upside. Retail sales were shown to have increased by 0.3% on the month in December rather than stagnating as projected.
If tomorrow’s German Factory Orders figure shows an unexpected decline, the Pound could extend gains against its European peer. That being said, the Bank of England’s (BoE) interest rate decision could weigh on Sterling if the central bank opts to take no action – as the majority of industry experts believe will be the case.
Earlier…
The Pound Sterling to Euro (GBP/EUR) exchange rate pushed back above the 1.32 level on Wednesday and could continue its advance in the hours ahead.
GBP/EUR Exchange Rate Rebounds after Greece-Inspired Declines
Sterling dipped to 1.3197 before posting a modest gain at the start of the European session.
The Pound Sterling to Euro (GBP/EUR) exchange rate declined by around a cent on Tuesday as the new Greek proposal to restructure rather than write out the nation’s debt was well received by investors.
The Greek parliament has suggested that a portion of domestic debt could be swapped for growth bonds. The nation would also maintain a primary surplus of slightly more than 1%, but would need a fresh cash injection to stabilise the Greek banking system.
The Pound Sterling to Euro (GBP/EUR) exchange rate achieved a high of 1.3245
As the plan is far more accommodating than the nation’s original desire to wipe out its debt obligations, it reduced the odds of Greece leaving the Eurozone and lent the common currency support.
However, Euro to Pound Sterling (EUR/GBP) gains were a little limited as the UK’s Construction PMI impressed.
The Pound Sterling to Euro (GBP/EUR) exchange rate brushed a low of 1.3197
Some very modest GBP/EUR movement occurred on Wednesday as the Eurozone’s final Services/Composite PMI figures were published.
While the numbers for Germany, Italy and the Eurozone as a whole were positively revised, the French services sector was shown to have fallen even further into contraction territory.
The French Services index was cut from 49.5 to 49.4 while Composite PMI was revised from 49.5 to 49.3.
If today’s UK Services PMI shows the expected improvement, the Pound could extend gains against its European peer as the local session progresses.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
Economists have predicted that the services gauge moved further above the 50 mark separating growth from contraction in January.
As the services sector accounts for more than 70% of total domestic growth, an on or above forecast result would be Pound supportive.
Additional GBP/EUR strength could be derived from the Eurozone’s retail sales report for December as it’s expected to show that sales stagnated on the month over the Christmas period.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading in the region of 1.3222
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trading in the region of 0.7560
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5164
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trading in the region of 0.6593
