The British Pound (GBP) exchange rates softened across the board today after a fall in UK house prices and the release of the Bank of England minutes. We examine the latest sterling to euro, dollar exchange rate forecasts?
Demand for the Euro exchange rates (EUR) increased in the wake of a positive upwards revision to the Eurozone’s finalised March inflation rate, which climbed out of negative territory to clock in at 0.0% instead.
This stronger showing boosted confidence in the outlook of the Eurozone economy, also diminishing fears that the European Central Bank (ECB) could loosen monetary policy further in the near future.
Following today's release of the Eurozone’s final inflation figures (March 2016), the euro to pound exchange rate ticked higher.
Other Currency Exchange News
On Saturday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The live inter-bank GBP-GBP spot rate is quoted as 1 today.
The GBP to USD exchange rate converts at 1.237 today.
Today finds the pound to swiss franc spot exchange rate priced at 1.126.
NB: the forex rates mentioned above, revised as of 20th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
Other Euro / Foreign Exchange News
The euro was a poor option for foreign currency investors on Wednesday, having been softened earlier on by the industrial production results for February.
Lately, the EUR has worsened even further against its peers, having dropped to -0.9% against the US Dollar (EUR/USD) and the -1.8% against the South African Rand (EUR/ZAR).
The negative correlation of the euro to dollar exchange rate added further downside pressure to the Euro on Wednesday, following hawkish comments from a Fed policymaker.
Speculation over a more imminent interest rate hike from the Federal Reserve has seen the Euro weaken, as markets remain concerned over the possibility of greater policy divergence between the Fed and the European Central Bank (ECB).
Markets have been selling out of the Euro to Pound Sterling (EUR/GBP) exchange rate this week as the matter of Greece’s bailout and economic reforms returned to the spotlight.
The Euro (EUR) suffered a sharp drop in demand after creditors were forced to pause talks in order to attend the IMF spring meetings in Washington, in spite of involved parties maintaining an optimistic outlook on progress.
With hefty debt repayments fast approaching in the summer Greece needs to conclude its first review as soon as possible, raising concerns amongst investors that the Eurozone could be plunged into a fresh crisis if agreement continues to elude negotiations.
Euro Currency Investors Disappointed as EZ Data Misses Prediction
Euro investors have been further discouraged as the latest Eurozone industrial production data was found to be weaker than forecast, clocking in at 0.8% rather than 1.3% on the year in February.
This disappointing showing indicates that the Eurozone economy has been more severely impacted by global market volatility than previously suggested, increasing concerns that domestic inflation is likely to prove equally muted.
However, as these figures do not reflect the impact of the European Central Bank’s (ECB) raft of monetary loosening measures deployed in March the bearish influence on the EUR/GBP exchange rate has been somewhat limited.
Nevertheless, with safe-haven demand dented by reassuring Chinese trade data there has been very little reason for investors to buy into the Euro on Wednesday morning.
Pound Sterling (GBP) Exchange Rates Gain Boost from UK Inflation Data
The Pound (GBP), meanwhile, has benefitted strongly from the March UK Consumer Price Index, which demonstrated higher inflationary pressure than forecast.
Rising from 0.3% to 0.5% on the year, this bullish result reignited speculation over the potential date of the Bank of England’s (BoE) first interest rate hike, with some economists suggesting a November rise could be on the cards.
As this was rather at odds with previous suggestions that the central bank could hold off on monetary tightening until 2020 the Pound Sterling to Euro (GBP/EUR) exchange rate extended its bullish run on Tuesday.
Pound to Euro Exchange Rate Forecast: Brexit Worries to Continue Dragging on Market Sentiment
However, ahead of Thursday’s BoE policy meeting, the mood towards the Pound failed to maintain this optimism as the uncertainty of June’s EU membership referendum continued to plague the minds of investors.
The latest polls suggest that the gap between the ‘Leave’ and ‘Remain’ camps has narrowed further, a prospect which has driven additional market dovishness as Kit Juckes of Societe Generale notes:
‘Sterling was knocked back a little, losing gains from an upside surprise in the CPI data, but this was the first time that the Euro appeared to react negatively which is noteworthy. “Brexit” would be worse for the UK than the rest of the EU, but it would undoubtedly be bad for all of Europe’s economic prospects.’