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GBP EUR Forecast: Pound to Euro Exchange Rate Climbs To 16-Month High - Gains Predicted

May 12, 2014 - Written by Ben Hughes

The GBP EUR Forecast May 2014: The major move in the global currency markets this afternoon saw the pound euro exchange rate break to its highest level since January 2013. The pair touched 1.2280 GBP/EUR earlier as investors continued to price-in an increased percentage chance that the European Central Bank will look to introduce its own version of asset purchase at its June policy meeting. Such an event would be likely to accentuate the recent shift out of euro-denominated assets. If the ECB does vote for the introduction of a Quantitative Easing programme then analysts are forecasting that the next stop heading Northwards for GBP EUR could be the pair’s 5 ½ year high of 1.2894.

The Pound Euro exchange rate is trading up +0.12% at 1.22666 GBP/EUR. (Mid-market rates as of 12/05/2014)



Elsewhere, the Pound has posted a respectable performance against the other majors on the day, sending the Pound US Dollar exchange rate back up above the 1.6900 GBP/USD threshold briefly earlier, while the Pound New Zealand Dollar exchange rate clipped above the 1.9600 GBP/NZD threshold during early trading.

Some of the renewed support for the Pound Sterling was fuelled by a survey from the Confederation of British Industry which found that the consensus amongst British business people is that the Bank of England will look to increase its key interest rate during the first quarter of 2015. Such a move would make the UK’s central bank of the first movers amongst the global central banking community with regards a tightening of monetary policy. Sterling is likely to benefit across the board during the second half of this year if such a BoE decision appears increasingly likely.

Meanwhile, China’s premier stock market registered strong gains at the end of last week; the Shanghai Composite Index climbed by over 2.0% during Friday’s session following the announcement of a raft of capital market reforms by the nation’s policymakers. These moves are likely to favour currencies including the Hong Kong Dollar (HKD), Singapore Dollar (SGD) and the Thai Baht (THB) moving forward.

The latest Pound Sterling & Euro exchange rates are as follows:


The Pound Sterling to Euro exchange rate is trading up +0.12% at 1.22666 GBP/EUR.
The Euro to Pound Sterling exchange rate is trading down -0.12% at 0.81522 EUR/GBP.
The US Dollar to Euro exchange rate is trading down -0.06% at 0.72626 USD/EUR.
The Canadian Dollar to Euro exchange rate is trading up +0.09% at 0.66733 CAD/EUR.
The Australian Dollar to Euro exchange rate is trading up +0.09% at 0.68064 AUD/EUR.
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