The Pound Sterling to Euro (GBP/EUR) exchange rate is trending within a limited range on Wednesday morning.
As traders await British economic data, the Pound is holding steady versus the majority of its most traded currency rivals. A slight declination can be attributed to ongoing political uncertainties as we draw ever closer to the general election.
The single currency, meanwhile, is also holding relatively steady versus most of its major peers. A set of positive data results hasn’t been particularly impactful as yet with geopolitics still dominating investor focus.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3802.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate rallied by around 0.65% on Tuesday morning.
After fourth-quarter British growth exceeded expectations on both a monthly and quarterly basis, the Pound advanced versus many of its major peers. The appreciation has been somewhat sluggish, however, with the forthcoming general election weighing heavily on investor confidence.
The Euro, meanwhile, softened versus nearly all of its most traded currency rivals despite reasonably positive economic data. The considerable declination is as a result of renewed potential for a Grexit after creditors dismissed Greece’s latest proposal for reform.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3767.
Pound Sterling (GBP) Exchange Rate Strengthens despite Political Uncertainties
British economic data produced positive results on Tuesday which allowed the Pound to strengthen versus many of its major peers. Of particular note was fourth-quarter Gross Domestic Product which showed growth of 3.0% on the year, eclipsing the median market forecast of 2.7%. Additionally, the GfK Consumer Confidence Survey bettered the market consensus of a rise from 1 to 2 in March, with the actual result reaching 4.
‘The earlier dates for the long weekend traditionally link to positive effects for retailers and with consumer confidence high, we expect shoppers to respond with their feet buoyed by the benefit of a recent pay day,’ Springboard’s Diane Wehrle said.
With the general election just around the corner however, and with opinion polls showing no clear indication of a majority, political uncertainties are weighing on demand for the British asset.
The Pound Sterling to Euro (GBP/EUR) exchange rate has fallen to a low of 1.3652 today.
Euro (EUR) Exchange Rate Plummets after Greek Reform Proposal is Rejected
European economic data has a minimal impact on the shared currency on Tuesday despite producing relatively positive results. An improvement in German retail sales, unemployment and Eurozone inflation has been micrified by geopolitics. It is important to note, however, that the Eurozone’s core measure of inflation dipped, which is likely to hinder investor confidence.
After Greece’s reform proposal was rejected, the Euro softened as traders renewed speculation of a Greek exit from the Eurozone. The losses have been compounded on Tuesday amid fears that Greece will have no choice but to join forces with Russia.
‘This visit is very important for Greece. We intend to deepen our relationship with Russia in the energy sector and thereby hope to gain a significant advantage,’ said Syriza MP Thanasis Petrakos, as quoted by Spiegel Online.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Gains
Given the lack of domestic data to curb the trend, and with ongoing tensions regarding the heightened possibility of a Grexit, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to hold gains for the remainder of the European session.
A lack of influential European data on Wednesday is likely to see geopolitics dominate trade once again, but the GBP/EUR pairing will be affected by British manufacturing data.
The Pound Sterling to Euro (GBP/EUR) exchange rate has reached a high of 1.3780 today.
