Pound to Euro (GBP/EUR) Exchange Rate Resumes Upward Trend, Euro Dollar Plunges Lower

July 25, 2014 - Written by Frank Davies

STORY LINK Pound to Euro (GBP/EUR) Exchange Rate Resumes Upward Trend, Euro Dollar Plunges Lower

Currency News UK: The pound to euro resumed position close to best 2014 exchange levels as the forex markets closed for the weekend. The GBP EUR exchange rate managed to recoup Thursday's losses as the single currency weakened once again.

The euro to dollar exchange rate (EUR/USD) plunged yet further as data out of the Eurozone came in below economist forecasts and as preliminary GDP data showed that the UK economy has finally returned to pre financial crisis levels.

The Pound Sterling found support at the end of Thursday’s session after the International Monetary Fund said that it has raised its economic growth forecast for the UK economy, the second time it has done so in 2014. The US based organisation said that the UK will maintain its status as one of the world’s fastest growing economies and would see a surge in growth of 3.2% by the end of the year.

Let's take a look at the latest GBP and EUR rates today (26/07/2014):

- The pound to euro exchange rate is 1.26405.
- The pound to dollar exchange rate is 1.69750.
- The euro to pound exchange rate is 0.79111.
- The euro to dollar rate is 1.34291.
- The dollar euro rate is 0.7446.

Earlier in Friday’s session the Euro came under pressure after data showed that business confidence in Germany, the region’s largest economy, fell for a third consecutive month in July and by a faster than expected pace. The IFO numbers, which are often used as an indicator of growth in Germany fell sharply and caused the Euro to slide closer to an eight-month low against the US Dollar and fall against the Pound.

The IFO business climate index fell to 108 in July, down from the previous month’s figure of 109.7 and was below economist expectations for a figure of 109.8.

Data out of Belgium also disappointed as it showed that industrial production in the country fell by -2.95% in May on a monthly basis and increased below expectations on an annual basis.

The main boon for the Pound Sterling (GBP) however came after the Office for National Statistics released its preliminary GDP report. According to the data GDP expanded by 0.8% on a quarterly basis and by 3.1% on an annual basis. Both figures were widely forecast by economists.

"Thanks to the hard work of the British people, today we reach a major milestone in our long term economic plan. But there is still a long way to go – the 'great recession' was one of the deepest of any major economy and cost Britain six years.
"Now we owe it to hardworking taxpayers not to repeat the mistakes of the past and instead to continue with the plan that is delivering economic security and a brighter future for all,"said Chancellor of the Exchequer George Osborne.

The report also showed that industrial production in the UK rose by 0.4% in the second quarter, manufacturing picked up by 0.2% and construction softened by 0.5% due to a decrease in output in May. The ONS expects that figure to have recovered in June due to increased building output.

The news was given a muted welcome by Chris Williamson, Markit's chief economist: "Any celebrations will of course also be marred by the fact that the milestone reminds us that it has taken some six years for the country to merely regain the economic might it had before the financial crisis struck."

The UK is the second to last of the G-7 economies to recover to pre-crisis levels.

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TAGS: Currency Predictions Daily Currency Updates Euro Forecasts