The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.41% on Thursday afternoon.
After the second estimates for first-quarter British growth remained unchanged (in spite of predictions for a 0.1% increase on both an annual and quarterly basis) the British asset depreciated. The stagnating predictions oiled a Sterling slide initiated by concern over a long period of uncertainty with an in/out referendum for British European Union membership due before the end of 2017.
The shared currency, meanwhile, gained versus many of its major peers after Greek officials made assertions that the Hellenic nation was close to unlocking bailout funds. Despite the fact that many European officials have since dismissed these statements, the common currency continues to advance. Even a European Central Bank (ECB) warning about contagion risks from a Greek exit from the Eurozone hasn’t been enough to quash Euro gains.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4013.
Pound Sterling (GBP) Exchange Rate Forecast to Soften versus the Euro on Missed GDP Expansion
With the threat of long-term political uncertainty weighing on demand for the British asset, the Pound is trading in a weak position against many of its closest competitors. With many officials warning the UK that they will ask for reforms in vane, the potential for the UK citizens to opt to leave the EU has increased.
UK Gross Domestic Product estimates stagnated in the first-quarter, fuelling the Sterling downtrend. Both the quarterly and the annual estimates held despite predictions of a slight increase. ONS chief economist Joe Grice said; ‘Today’s unchanged figure of 0.3% growth in GDP in the first quarter of 2015 reflects small upwards revisions to production and construction, offset by a downward revision to services. It confirms the picture of somewhat weaker growth in the first quarter than in recent ones. But no single quarter’s figures should be given undue weight.’
A Treasury spokesman said; ‘It is clear that the foundations for a sustainable recovery are being laid. While it is good news that the economy continues to grow, the job is not done and we must go on working through the plan that’s securing a better economic future.’
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3978 today.
Euro (EUR) Exchange Rate Climbs despite Conflicting Opinions on Greek Bailout
Seemingly in defiance of contrasting opinions as to the progress made with Greece and the Eurogroup, the shared currency continues to advance against many of its major peers. This is despite warnings about contagion and the heightened prospect of a forced Grexit if the cash-strapped nation defaults on key loan repayments.
‘In the absence of a quick agreement on structural implementation needs, the risk of an upward adjustment of the risk premia demanded on vulnerable Euro-area sovereigns could materialize,’ the ECB said in its twice-yearly Financial Stability Review, published on Thursday in Frankfurt. ‘The lengthy and uncertain process of negotiations between the newly formed Greek government and its creditors’ has already contributed to bouts of extreme volatility in Greek markets’, it said.
‘Financial-market reactions to the developments in Greece have been muted to date. Developments in Greece contrasted with broader Euro-area trends as yields increased and spreads vis-a-vis Germany widened.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Losses ahead of German Retail Sales and UK Consumer Confidence
With a lack of further domestic data publications pertaining to both the UK and Europe to provoke volatility, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to hold losses for the remainder of Thursday’s European session. Friday should see GBP/EUR volatility with German Retail Sales and British Consumer Confidence reports due for publication.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.4087 today.
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