Pound Euro Exchange Rate (GBP EUR) Remains Low Despite Draghi And Van Rompuy?s Words

Modified: Tuesday, 19 February 2013 08:38 BST - Written by John Cameron

STORY LINK Pound Euro Exchange Rate (GBP EUR) Remains Low Despite Draghi And Van Rompuy?s Words

A light schedule of global data releases during yesterday’s session meant that investors placed increased focus on public comments from policymakers and central bankers. European Council President Herman Van Rompuy took to the lectern to deliver a set piece speech defending the controversial eurozone-wide budgetary pact which the region’s collective leaders agreed upon during a summit on 7th & 8th February. The agreement saw the EU’s budget for 2014-2020 trimmed by a significant €32bn – a deal which the UK’s policymakers billed as a major victory. Other continental European states were far less enthusiastic regarding the austerity pact, with France’s centre-left leadership proving particularly critical.

Division of opinion amongst the EU’s nation states came to the fore later yesterday, when European Central Bank President Mario Draghi spoke publicly in an attempt to take the sting out of the ongoing ‘currency wars’ debate. The eurozone’s policymakers have been quick to quell speculation regarding the advent of a competition amongst the world’s leading economies to actively weaken their respective currencies at the fastest possible pace. Once again, France’s leadership provided the lone voice of dissent ahead of last week’s meeting of the eurogroup of Finance Ministers. French President Francois Hollande pointed to the dramatic weakening of the Yen over the past six months, suggesting that Europe should go down the same route with the single currency.

Draghi continued to trot out the official party line yesterday, describing ‘language referring to currency wars’, as ‘excessive’, and suggesting that the recent weakening of the Yen was simply a coincidental by-product of Japan’s domestic monetary policy. However, the ECB President went on to partially contradict himself when he observed that the relatively strong level of the euro, which appreciated to a 15-month high against the US Dollar earlier this month, might be harming the eurozone’s tentative recovery.

Political fissures in the eurozone and the potentially detrimental effect which a strong euro might be having on economic activity in the region have failed to stunt the single currency’s performance this week. The Pound euro exchange rate (currency : GBP EUR) spent the whole of yesterday’s session residing in the 1.1500s, having traded above the 1.1800 level as recently as the start of last week.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Daily Currency Updates Euro Forecasts Euro Pound Forecasts Pound Eu Forecasts