GBP/EUR Outlook: Pound Euro Exchange Rate Forecast Could See gains

April 15, 2014 - Written by Ben Hughes

STORY LINK GBP/EUR Outlook: Pound Euro Exchange Rate Forecast Could See gains

The Pound Euro exchange rate hovered either side of the 1.2100 GBP/EUR threshold yesterday. The pair could be afforded further direction later today with the publication of this month’s edition of the whole of eurozone ZEW Index. A showing of above last month’s print of 61.5 will be needed in order to push the euro to Sterling exchange rate higher EUR/GBP. Trade balance numbers from the euroland, published at the same time, also have the potential to effect the relative value of the single currency. Any subsequent move higher for GBP/EUR will have to break through the pair’s existing high at 1.2258 in order to be taken seriously.

Momentum for the Pound Sterling (currency:GBP) built during yesterday and by aftertrading during the London equities session, Sterling (GBP) was trading into the black against the US Dollar (USD), the euro (EUR), the Swiss Franc (CHF) and the New Zealand Dollar (NZD).

However, the Pound had incurred slight losses against the Australian and Canadian Dollars, sending the Pound Aussie Dollar exchange rate down to as low as 1.7737 GBP/AUD on the day. Meanwhile, the Sterling Canadian Dollar exchange rate edged lower to touch 1.8295 GBP/CAD during late trading. Support for the Commodity Dollars was driven by a generalised uptick in global appetite for risk on the day.

However, yesterday’s gains for the Pound are by no means guaranteed to persist today, given that this morning brings the publication of the latest set of UK Consumer Price Index inflation figures. A drop from February’s print of 1.8% down to 1.6% is anticipated by analysts and such an outcome could see institutional investors push back their expectations regarding the date of the next Bank of England interest rate rise. With the rate of price rises dropping to close to zero the BoE are unlikely to countenance measures which would further dampen aggregate demand in the British economy.

Relevant Euro Exchange Rates (Updated: 12:00 GMT 15/04/2014)

The Pound Sterling to Euro exchange rate is trading up +0.07% at 1.21150 GBP/EUR.
The Euro to Pound Sterling exchange rate is trading down -0.07% at 0.82542 EUR/GBP.

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