Pound Sterling to Euro (GBP/EUR) Exchange Rate Pares Advance after Manufacturing Data
The Pound Sterling to Euro (GBP/EUR) exchange rate went on to shed over 0.3% over the course of the European session following the publication of a disappointing Markit Manufacturing PMI for the UK.
The gauge of manufacturing fell to a three-month low of 52.5 in December rather than posting the moderate increase expected.
Markit economist Rob Dobson said of the result; ‘The positives to come out of the December readings are the continued growth, further solid increases to workforce numbers, a supportive domestic market that is driving new contract wins and the broad-base of the upturn across the consumer, intermediate and investment goods industries. The main weak spot remains exports, with overseas new order inflows stagnating amid weaker economic growth in key markets and the ongoing lethargy of the Euro area.’
The Pound Sterling to Euro (GBP/EUR) exchange rate fell to a low of 1.2838 after the report was published.
Meanwhile, the Euro to US Dollar (EUR/USD) exchange Rate dropped to a four and a half year low of 1.2035 US Dollars per Euro.
The policy divergence between the Federal Reserve and the European Central Bank (ECB) played a part in the EUR/USD downtrend.
As stated by currency expert Thomas Averill; ‘While the Fed is not going to rush into any action, rates will go up. The market is very long the Dollar against the Yen and Euro, and across the board.’
The movement in the EUR/USD pairing also saw forex strategist John Hardy remark; ‘We are seeing an extension of ongoing themes. It’s all about continued improvement in the US and whether that first Fed rate hike is moved forward. Then there’s the anticipation of the ECB launching an easing programme.’
Earlier…
The Pound Sterling to Euro (GBP/EUR) exchange rate surged to a high of 1.2908 as 2015 dawned, with the British asset trouncing its European cousin amid Greek election and European Central Bank (ECB) stimulus concerns.
GBP/EUR Exchange Rate Starts 2015 Strongly
With bets that the ECB intends to roll out full-scale bond buying in the very near future weighing on the Euro, the Pound Sterling to Euro (GBP/EUR) exchange rate advanced to its strongest level for seven years on New Year’s Day.
The GBP/EUR exchange rate also benefited from speculation surrounding the upcoming election in Greece.
Industry experts are envisaging a victory for the left-wing Syriza party, led by Alexis Tsipras.
If Tsipras does come to power it could result in the attempted restructuring of the Greek austerity programme and may even lead to the nation’s expulsion from the currency bloc.
Although the GBP/EUR pairing has since edged away from its multi-year high, strength in the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to persist in the first few weeks of the year.
The Pound Sterling to Euro exchange rate achieved a high of 1.2908
The Euro was also trending lower against the US Dollar having fallen considerably against its US rival over the course of the year.
Further EUR/USD losses are anticipated.
The Euro to US Dollar (EUR/USD) exchange rate fell to a low of 1.2032
In the view of currency strategist Simon Derrick; ‘Looking into 2015, I think we will move towards a level that does reflect the situation in the economy and monetary policy. 1.10 US Dollars per Euro seems about right for next year. The opening few weeks of the year will be a time to be cautious, but on the whole, do I think the Euro goes down? Yes, absolutely.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
In the hours ahead Pound Sterling to Euro (GBP/EUR) exchange rate movement could occur in response to the publication of final Markit manufacturing stats for the Eurozone and its largest economies.
The UK’s own manufacturing figure for December will also have an impact, as will UK Net Consumer Credit and Mortgage approvals data.
In terms of US reports, the ecostats with the most potential to drive market movement include Markit Manufacturing PMI, Construction Spending numbers and the ISM Manufacturing gauge.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.2877
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7764
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5520
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trading in the region of 0.6440
