The Pound Sterling to Euro (GBP/EUR) exchange rate is likely to fluctuate over the course of the coming week, although there are surprisingly few data publications for both the UK and the Eurozone. However, post-holiday trading should cause data to have a greater impact than it would have done during regular trading.
Sunday December 28th GBP/EUR Exchange Rate to Soften
Sunday’s European data will be of interest to those invested in the Euro. The German Import Price Index and German Retail Sales data ought to determine the direction of single currency movement early on Monday morning. There won’t be any British data publications on Sunday, so the Euro will advance if the data prints positively.
Monday December 29th GBP/EUR to Hold Steady
With a complete absence of economic data pertaining to both the UK and the Eurozone, the Pound to Euro exchange rate is unlikely to be subject to intense volatility. Any movement will be dictated by fluctuations in the currency market.
Tuesday December 30th GBP/EUR to Strengthen
Once again, the economic calendar is relatively sparse for those interested in the Pound to Euro exchange rate. British Nationwide House Prices data may provoke a little volatility, but the data doesn’t hold a great deal of weighting to initiate changes in the market. Similarly, the Eurozone M3 data may impact upon the common currency, although the data is of little significance.
Wednesday December 31st GBP/EUR to Hold Steady
In the full understanding that I am sounding highly repetitive, once again Wednesday’s economic docket has a complete absence of British and European data. Therefore, it is unlikely that the pairing will undergo any significant changes.
Thursday January 1st GBP/EUR to Trend within a Tight Range
Given that most traders will be nursing a hangover after the festivities of New Years Eve, there will be very little activity on Thursday.
Friday January 2nd GBP/EUR to Fluctuate
Once the holiday season is in the background, regular trading ought to resume. In fact, given that traders will be eager to make up for lost time, there is the distinct possibility of highly volatile markets on Friday. In terms of European data, the Italian, French, German and Eurozone Manufacturing PMIs will be of interest to those invested in the shared currency.
British data has the potential to provoke changes for the Pound. Net Consumer Credit, Net Lending Securities on Dwellings, Mortgage Approvals and the Manufacturing PMI will all be significant for those trading with the Pound.
Pound Sterling to Euro (GBP/EUR) Forecast for 2015
We forecast that the GBP/EUR exchange rate will strengthen considerably over the course of 2015. This is because the Bank of England is in a far better position than that of the European Central Bank to normalise monetary policy. All indications are that in 2015 the ECB will have to employ unconventional stimulus measures in order to counteract potential Eurozone recession.
