Outlook For Pound To Euro Exchange Rate (GBP EUR) Improves Following Weak German ZEW Index

Published: Tuesday, 14 May 2013 15:00 BST - Written by Toni Johnson

STORY LINK Outlook For Pound To Euro Exchange Rate (GBP EUR) Improves Following Weak German ZEW Index

The main event in the currency markets this morning was provided by the publication of the latest edition of the closely-monitored ZEW Sentiment Survey in Germany. Analysts had been anticipating that the gauge of confidence amongst economic participants in the eurozone’s premier economic power would show a healthy increase from last month’s print of 36.3.

When the survey was released, it showed a tiny increase of only 0.1 in the survey’s headline figure; the development came as a major blow to investors holding euro-denominated assets and initially sent the Pound to Euro exchange rate (currency : GBP EUR) to within a whisker of the 1.1800 level during the latter part of this morning’s European equities session. However, the pair subsequently peeled back and is currently trading at 1.1779. It would appear, given the disappointing nature of the German data, that there could be further upside to come for GBP EUR in the near-term.

Elsewhere, the Australian Dollar has come under renewed selling pressure against nearly all of the sixteen most-actively traded global currencies during today’s session after the nation’s Treasurer Wayne Swan delivered his sixth, (and possibly his final), budget statement. Swan had to eat a large slice of humble pie when he addressed the Australian parliament earlier, having asserted that he would be able to balance the nation’s books last year. He radically altered this prediction, telling Australia’s lawmakers that this year’s gap between government outgoings and revenues stood at a whopping AUD19.4bn in 2012. Swan went on to forecast that the national deficit for the coming year would be almost as large at AUD18.0bn.

The markets did not like the sound of what Swan had to say and moved against the Aussie. The shift saw the Australian Dollar to US Dollar exchange rate (currency : AUD USD) settle below the psychologically-key parity level to touch an intraday low of 0.9896. Meanwhile, the Pound to Australian Dollar exchange rate (currency : GBP AUD) has broken back above the 1.5400 level today.

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: Australian Dollar Forecasts Currency Predictions Euro Forecasts Eur Forecasts