The Pound Sterling to Euro (GBP/EUR) exchange rate strengthened by around 0.88% on Friday morning.
After the European Central Bank (ECB) introduced a €60 billion a month quantitative easing programme, the shared currency slumped versus the majority of its most traded currency rivals. The common currency extended declines on Friday as traders priced in the extent of the expansive measures.
The Pound, meanwhile, is trending higher versus most of its major peers thanks to the prospect of cheaper trade with Europe. Friday’s domestic data also printed positively, allowing the Pound to advance further.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3338.
Pound Sterling (GBP) Exchange Rate Gains on UK Data
Friday’s British data showed retail sales bettered the median market forecast. Retail Sales was forecast to drop from 6.8% to 3.4%, but the actual result only fell to 4.2%. Retail Sales including Auto also eclipsed the market consensus of drop from 6.4% to 3.0%, with the actual result only falling to 4.3%.
With market sentiment considerably dampened following a spate of policy easing from major central banks, the higher-yielding potential of the Pound versus many of its major counterparts has seen heightened demand. This is especially true because the high-yielding, risk-correlated currencies are too hot to handle with speculation of a currency war building.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low today of 1.3185.
Euro (EUR) Exchange Rate Edges Lower despite Relatively Positive Data
Given that the ECB were far more aggressive than most analysts expected, it is unsurprising that the shared currency continues to decline versus most of its peers on Friday. The loose policy micrified positive results from domestic data, which is likely to be a common occurrence until the dust from the QE settles.
German Services and Composite PMIs gained from precious figures, but the German Manufacturing PMI softened fractionally. Additionally, Eurozone Services, Manufacturing and Composite PMIs gained from previous figures.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Extend Gains
With mounting negative sentiment towards the Euro amidst risk-averse trading, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to continue trending higher for the remainder of Friday.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high today of 1.3343.
