Pound Sterling to Euro Exchange Rate Forecast : Can GBP EUR Surpass Recent 2012 Highs?

July 17, 2014 - Written by John Cameron

STORY LINK Pound Sterling to Euro Exchange Rate Forecast : Can GBP EUR Surpass Recent 2012 Highs?

The major move in the global currency markets during this week's trading session saw the Pound Sterling to euro (GBP/EUR) exchange rate climb to its highest level since September 2012 at 1.2674.

The forward move for the Pound Sterling (GBP) was driven by the news that the level of joblessness in the UK had fallen to its lowest level for six years during the three months to the end of April. The drop-off of some 121,000 in the total number of unemployed Britons to 2.12m outstripped analysts’ expectations and triggered a bout of broad Sterling support in the markets.

As of Saturday 10:00am, the Pound to Euro exchange rate is 1.26329 GBP/EUR.

Nick Parsons, head of research at National Australia Bank observed that, ‘the U.K. economy is on every measure outperforming euro land.’ Parsons went on to state that, ‘the fall in the jobless rate is clearly good news. Slowing wage growth is a temporary statistical phenomenon, which will be reversed. This is an opportunity to reload with Sterling longs.’

The volume of bets from currency traders predicting that the UK unit would register gains in the market hit their highest level since the turn of the year during the middle part of last month.

A total of 52,296 Sterling long contracts were in the market during the week ending 17th June – this represented a significant increase from the 35,842 of a week before.

The Euro to Pound Sterling exchange rate is trading up +0.18% at 0.79079 EUR/GBP.

However, the numbers of net-long traders receded once again during the final week of June when Bank of England Governor Mark Carney asserted that a UK interest rate hike might not be as close at hand as had been previously thought. The top man at the BoE stated that any future UK interest rate rises would be ‘data driven’.

However, the sessions which followed Carney’s words have seen the Pound gain momentum, sending the pair through to successive multi-month highs as domestic data provided further reasons for optimism regarding the future prospects of the UK economy.

Forecast - Pound Euro Rate to Climb to Resistance

Analysts now forecast that if tomorrow morning’s whole of eurozone Consumer Price Index figures for last month suggest that the European Central Bank’s expansionary monetary policies, which it announced some ten weeks ago, are failing to steer the euroland economy away from a damaging bout of deflation, then the Pound euro exchange rate will climb towards its key level of resistance at 1.2894.

The pair last reached this level in the July of 2012 and it stands as a 5 ¾ year high.

Relevant Euro Exchange Rates - 19th July 2014

The Euro to Aus Dollar exchange rate is 1.43972 EUR/AUD.
The Euro to Cdn Dollar exchange rate is 1.45170 EUR/CAD.
The Euro to Swiss Franc exchange rate is 1.21521 EUR/CHF.
The Euro to Chinese Yuan exchange rate is 8.39626 EUR/CNY.
The Euro to Pound exchange rate is 0.79158 EUR/GBP.
The Euro to HK Dollar exchange rate is 10.48339 EUR/HKD.
The Euro to NZ Dollar exchange rate is 1.55583 EUR/NZD.
The Euro to US Dollar exchange rate is 1.35249 EUR/USD.

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