Pound to euro exchange rate: Bad news for sterling as a further decline is forecast
POUND to euro exchange rate: Uncertainly continues around the GDP/EUR exchange rate as the fourth quarter was negatively revised.
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After a promising nudge higher on Wednesday, the pound is set to be hit with a further fall.
Following the the UK’s latest disappointing unemployment figures, yesterday saw the pound to euro exchange rate fall from 1.1355 to 1.1317 according to the latest Bloomberg report.
The fall prediction follows a revision of the GDPs fourth quarter.
In a comment from currency analyst for TorFX Laura Parsons said: “There was more bad news for the pound on Thursday as the UK’s GDP estimate for the fourth quarter was negatively revised.”
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As a result of the review, growth has fallen from 0.5 to 0.4 per cent causing the sterling to fall also.
Laura explained that this fall in growth has caused the pound to decline against most of the major currencies.
The uncertain health of the Eurozone manufacturing sector also has a part to play in the decline.
With the unanswered questions hanging in the air of the future of the UK post Brexit, these figures will continue to flux.
GBP/EUR exchange rate losses were fairly minimal however, despite increasing hopes that the European Central Bank (ECB) is moving closer to tightening monetary policy
Uncertainly in Germany follows an ongoing review of their business index but this is having a positive impact of the pound.
Ms Parsons said: “GBP/EUR exchange rate losses were fairly minimal however, despite increasing hopes that the European Central Bank (ECB) is moving closer to tightening monetary policy”.
Laura highlighted this as a direct result of the poor performance of German IFO business sentiment index.
If figures continue to disappoint in Germany throughout February, the pound could edge higher.
There is however, still hope of a future increase in the pound.
The Eurozone’s consumer price index will be questioned toady and the result could be good news for the pound.
Laura highlighted that economists forecast a slump in the sentiment, if this is the case it would help the pound bounce back against the the euro.
This is already showing an increase in the GDP/EUR exchange rate as at 7.30am this morning the rate has risen back up to 1.1340 according to Bloomberg, although this is still fractionally less that Wednesday’s report of 1.1355.
