The Pound Sterling to Euro (GBP/EUR) exchange rate was trading higher in the first half of Monday’s European trading after UK Mortgage Approvals hit a six-month high and investors eagerly anticipated the outcome of Germany’s Consumer Price Index (CPI).
UK Mortgage Approvals reached 61,760 in February, despite forecasts to hit only 61,500 after January’s 60,707. The ecostat came as a surprise as we draw closer to the May UK general election and a potentially massive shakeup in politics—a development which could hinder economic growth, confidence and the Pound Sterling exchange rate.
Conservatives lead by 4 points as Miliband sees no Paxo bounce – our new poll for @itvnews / @DailyMailUK pic.twitter.com/hdzTJPbFi6
— ComRes (@ComResPolls) March 29, 2015
Green party leader Natalie Bennett stated: ‘This general election is the closest in a generation. It’s clear that people are sick of business-as-usual politics, and desperate for change.’
BoE Stress Test Forecast to Cause Massive GBP/EUR Exchange Rate Fluctuations
Furthermore, the Bank of England (BoE) could impact Pound Sterling to Euro (GBP/EUR) exchange rate trading significantly in the near future as it’s been announced that a new stress test will be undertaken. Britain’s banks will be put through the hypothetical ringer and pushed to see if they have enough capital to survive another event like the 2008 global financial crisis.
Meanwhile, the Euro is also pressured under the prospect of political change with ongoing Greek negotiations threatening to see the nation leave the currency bloc. However, Monday is expected to see Greece submit reform proposals which could give a kick to stagnating austerity discussions.
Eurozone Economic Confidence jumped in March from 102.3 to 103.9, well above the 103.0 forecasts—the sentiment index registered the highest level since July 2011.
Economist Howard Archer stated: ‘A third successive, and markedly, increased rise in overall Eurozone economic sentiment to a 44-month high in March indicated that a more favourable growth environment in the Eurozone is increasingly being fostered by the much more competitive Euro, low oil prices and major ECB [European Central Bank] stimulus.’
‘Consumer confidence across the Eurozone rose to a neat eight-year high in March while sentiment improved in most business sectors.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
Tuesday’s going to be yet another big day for the Euro to Pound Sterling (EUR/GBP) exchange rate with the release of German Unemployment Rate and Unemployment Change ecostats. German Retail Sales are also scheduled to emerge, followed by Eurozone Unemployment Rate and Consumer Price Index figures.
The UK’s final Gross Domestic Product (GDP) ecostat will also be out and has the potential to cause GBP/EUR movement.
However, if German inflation prints favourably today, the GBP/EUR currency pair has the potential to dip[ below the 1.36 region it’s currently trading within.
The Euro to Pound Sterling (EUR/GBP) exchange rate is trading at 0.7310; the Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3683.
