Pound Sterling to Euro (GBP/EUR) Exchange Rate Trending Lower
As the pace of quarterly UK growth was shown to have slowed by more-than-expected in Q4, the Pound Sterling to Euro (GBP/EUR) exchange rate fell by around 0.6% shortly after the data was published.
The nation expanded by 0.5 % on a quarter-on-quarter basis, down from growth of 0.7% in quarter three and less than the 0.6% expansion expected.
However, the UK did grow at its fastest annual pace since 2007 – registering growth of 2.6% across 2014 as a whole.
Economist Joe Grice of the Office for National Statistics (ONS) commented that it was too soon to say whether the slowdown witnessed towards the close of 2014 will persist.
He stated; ‘The dominant services sector remains buoyant while the contraction has taken place in industries like construction, mining and energy supply.’
Similarly, economist Samuel Tombs noted; ‘With the recent halving of oil prices providing a timely boost to households’ discretionary spending power, credit still becoming cheaper and pay growth on an improving trend… the best days of the UK’s recovery may still lie ahead.’
After the growth figures were published, the Pound Sterling to Euro (GBP/EUR) exchange rate was trading in the region of 1.3335
Earlier…
The Pound Sterling to Euro (GBP/EUR) exchange rate moved away from its recent 7-year high prior to the release of the UK’s fourth quarter growth figures.
GBP/EUR Exchange Rate Trending above 1.33
The Pound Sterling to Euro (GBP/EUR) exchange rate remained trending above the 1.33 level on Tuesday but shed over 0.4% on the day’s opening levels amid concerns that today’s UK GDP data will show that growth slowed by more-than-expected in the final quarter of the year.
The GBP/EUR pairing began the week strongly as anti-austerity party Syriza won the Greek election and, initially, inspired ‘Grexit’ concerns.
However, as Syriza failed to secure enough backing to govern Greece alone, fears for the nation’s future in the currency bloc receded and the common currency advanced on peers like the Pound and US Dollar.
The EUR/GBP pairing also gained as a result of Germany’s IFO Business Conditions/Climate reports.
The measure of Germany’s business confidence advanced to a six-month high, indicating that businesses aren’t as concerned by the recent European Central Bank intervention and global economic slowdown as you might have expected.
The Pound Sterling to Euro (GBP/EUR) exchange rate achieved a high of 1.3446
However, declines in the Pound Sterling to Euro (GBP/EUR) exchange rate were limited as Bank of England (BoE) policymaker Kirstin Forbes intimated that if the recent central bank actions have a positive impact on global growth, UK interest rates could be increased sooner than currently projected.
In the view of one London-based industry expert; ‘We should see some stabilisation and perhaps some scope for Sterling to move higher in the near term. The BoE has expressed some concern in the past about the extent to which UK rate-hike expectations have been pushed back into 2016. That’s fairly consistent with the Forbes comments that the market may be overly complacent on the timing of the first UK rate hike.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
Although economic reports for the Eurozone are lacking today, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to experience volatility in the hours ahead as a result of the day’s big UK ecostat.
The UK is set to publish its fourth quarter growth figures at 09:30 GMT.
The Pound Sterling to Euro (GBP/EUR) exchange rate fell to a low of 1.3337
A slowing in expansion from 0.7% to 0.6% has been priced in, but if growth declined by more than this, the Pound is likely to fall against rivals like the Euro and US Dollar.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7496
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3342
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5095
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trading in the region of 0.6623
