The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within a tight range on Wednesday morning.
As traders await British and European data, due for publication later on Wednesday morning, the Pound Sterling to Euro (GBP/EUR) exchange rate is trending within a tight range. However, with the situation in Greece far from resolving, geopolitics is likely to dictate single currency movement.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3709.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate rallied by around 0.47% on Tuesday morning.
After UK data produced positive results, including a report from the Confederation of British Industry (CBI) highlighting better-than-expected 1st quarter growth, the Pound strengthened versus most of its major peers. The CBI report also warned, however, that a stronger Pound would weigh on British exports.
The Euro, meanwhile, is seeing a lack of demand as the situation in Greece continues to throw up more questions than it does solutions. Below forecast investor confidence also aided the single currency declination.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3686.
Pound Sterling (GBP) Exchange Rate Strengthens on Services Data
British data printed positively on Tuesday, which caused the Pound to strengthen versus most of its major peers. Of particular significance, in terms of the Pound’s strength, was the UK services data. The Services PMI eclipsed the median market forecast of a rise from 56.7 to 57.0, with the actual result reaching 58.9.
Chris Williamson, Chief Economist at Markit, stated; ‘The UK economy moved up a gear in March, recording the strongest pace of growth since last August. The three PMI surveys collectively indicate that the economy grew by 0.7% in the first quarter, reviving from the slowdown seen late last year.’
CBI also released a positive report with regard to 1st quarter UK growth, although they warned that a strong Pound is likely to have a detrimental effect on exports. ‘Our surveys show it’s been a solid start to the year with the prospect of stronger growth to come. The benefits of lower oil prices should be increasingly felt; with cheaper petrol boosting households’ incomes and spending power, and cutting costs for many businesses,’ said CBI’s deputy director general Katja Hall.
The Pound Sterling to Euro (GBP/EUR) exchange rate has fallen to a low of 1.3600 today.
Euro (EUR) Exchange Rate Softens on Investor Confidence
With the ongoing situation in Greece showing no signs of abating, it is perhaps unsurprising that investor confidence failed to meet with market expectations. Eurozone Investor Confidence was forecast to improve from 18.6 to 20.8, but the actual result only reached 20.
Furthermore, the rift between Germany and Greece grows ever wider as Athens is, once again, demanding World War Two reparations to the tune of €279 billion. This fractured relationship is amplifying speculation of a Greek exit, especially with the potential of a deal with Russia on the horizon.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Gains
Given that the situation in Greece is having a marked impact on investor confidence, and with a lack of data to curb the trend, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to hold gains for the remainder of the European session.
Wednesday is likely to see heightened GBP/EUR volatility with several influential European data publications due for release.
The Pound Sterling to Euro (GBP/EUR) exchange rate reached a high of 1.3705 today.
