The Pound Sterling to Euro (GBP/EUR) exchange rate softened again on Wednesday to slide to a fresh 1-month low.
The Pound Sterling to Euro (GBP/EUR) exchange rate slipped to a session low of 1.3539
Sterling remained under pressure following the release of Tuesday’s weaker than forecast inflation data. The report showed that inflation vanished to hit zero for the first time on record and caused economists to raise their bets that an interest rate rise by the Bank of England is now unlikely. The central bank is now just as likely to cut rates, as it is to hike them.
The Euro strengthened after business optimism data out of Germany increased by a larger than forecast margin in March, adding to signs that the wider Eurozone economy is beginning to strengthen.
According to the Ifo Institute Index, confidence on the Eurozone’s largest economy increased from last month’s figure of 106.8 to 107.9 in March. The figure was better than the 107.3 forecast by analysts.
The report also showed that the Current Assessment Index increased to 112.0 in March from 111.3 in February, matching expectations for a reading of 112.0 and that the Business Expectations Index, which measures attitudes toward business prospects over the next six months, improved to 103.9 this month from 102.5 in February, beating estimates for 103.0.
Further losses for the Pound Sterling were restrained however as data showed that mortgage approvals in the UK climbed to the highest level in 5-months in February.
According to the British Banker’s Association, the number of new mortgages approved rose from January’s figure of 36,400 to 37,300 in February. The figure beat economist forecasts for a rise to 36,900. The data eased some of the concerns over the strength of the UK housing sector.
The Euro could come under pressure as the week progresses if it looks likely that a deal will not be reached between Greece and its creditors. The nation is expected to run out of money in the first week of April.
Future Currency Forecast Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,Euro,1.3576 ,
Pound Sterling,,US Dollar,1.4905 ,
Euro,,Pound Sterling,0.7364 ,
Euro,,US Dollar,1.0979 ,
[/table]
