The Pound Sterling to Euro (GBP/EUR) exchange rate strengthened by around 0.31% on Wednesday morning.
After British labour market data produced better-than-expected results, the Pound strengthened versus the majority of its most traded currency rivals. The advance has been somewhat laboured, however, as traders await the Bank of England (BoE) Inflation Report due for publication later on Wednesday morning.
The Euro, meanwhile, edged lower versus many of its major peers in response to disappointing growth data from the currency-bloc’s most influential nation. The losses have been slowed, however, thanks to impressive French growth data and improvement in German inflation data.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4000.
Yesterday…
The Pound Sterling to Euro (GBP/EUR) exchange rate declined by around -0.44% on Tuesday morning.
After British economic data produced positive results, the Pound strengthened versus many of its major peers. The advance was somewhat slowed, however, amid speculation that Prime Minister David Cameron will bring forward the European Union referendum in order to satisfy right-wing Tory back-benchers.
The Euro, meanwhile, advanced versus the majority of its most traded currency competitors on Tuesday. This is as a result of improved sentiment after Greece repaid the International Monetary Fund (IMF) €750 million ahead of schedule. The geopolitical turmoil in Greece has far from abated, however, with discussions between Athens and the Eurogorup showing little sign of significant progress.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3915.
Pound Sterling (GBP) Exchange Rate Forecast to Strengthen versus the US Dollar on Positive Domestic Data
With British industrial output reaching a six-month high, the Pound strengthened versus many of its most traded currency peers. On the year, Industrial Production gained by 0.7% in March; eclipsing the median market forecast of a 0.1% increase. March’s Manufacturing Production also bettered the market consensus of 1.0% growth on the year, with the actual result reaching 1.1%.
‘The industrial sector may have turned the corner, no doubt helped by the lower oil price,’ said Vicky Redwood, an economist at Capital Economics in London. ‘We remain hopeful that we should see at least a little rebalancing of the economy this year.’
Sterling gains have been somewhat laboured, however, thanks to heightened speculation that the newly re-elected Prime Minister David Cameron will bring forward the promised referendum on the UK’s membership in the European Union. Many now expect the referendum in 2016 as the more right-wing Euro-sceptic Tory back-benchers pressure Cameron into speedy action.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3833 today.
Euro (EUR) Exchange Rate Forecast to Strengthen versus the Pound and the US Dollar after Greece Upheld IMF Repayment
In response to Greece having made a crucial IMF repayment ahead of schedule, the single currency rallied versus the majority of its most traded currency competitors. However, the likelihood of the shared currency resuming bearishness is relatively high considering that talks between Athens and the Eurogroup are showing little sign of significant progression. In addition, Greek Finance Minister Yanis Varoufakis stated that he sees the country running out of money in as little as two weeks.
Mr Varoufakis told reporters in Brussels last night, ‘The liquidity issue is a terribly urgent issue. It’s common knowledge, let’s not beat around the bush. From the perspective [of timing], we are talking about the next couple of weeks.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Hold Losses ahead of the GDP Estimate
Ahead of the UK NIESR Gross Domestic Product Estimate for April, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to hold losses. Should the data print positively, however, the pairing could move back towards the opening level at the start of Tuesday’s European session.
Wednesday will be of heightened significance for the GBP/EUR pairing with Eurozone and German growth data and British labour market data due for publication.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.3978 today.
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