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Pound to Euro Currency Exchange Rate - Short-Term Forecast: Where Will GBP/EUR go Now?

September 2, 2014 - Written by John Cameron

Currency News UK: Short-Term Pound to Euro currency exchange rate forecast: September's GBP to EUR exchange rate falls - Analysts are in agreement that this week’s session in the global currency markets is likely to bring renewed FX volatility.

Most investors forecast that there will be movement for the euro (currency:EUR) against the other major tenders, while predictions are rife that the US Dollar (currency:USD) may also swing one way and the other.

Our leading analysts explore the drivers in the currency markets and make their predictions for the next 24hrs below.

Updated Euro Exchange Rates Today (03/09/2014)



- The Euro to Australian Dollar exchange rate is trading down -0.48% at 1.40882 EUR/AUD.
- The Euro to Canadian Dollar exchange rate is trading down -0.09% at 1.43400 EUR/CAD.
- The Euro to Pound Sterling exchange rate is trading value +0% at 0.79735 EUR/GBP.
- The Euro to New Zealand Dollar exchange rate is trading down -0.21% at 1.57855 EUR/NZD.
- The Euro to US Dollar exchange rate is trading up +0.11% at 1.31460 EUR/USD.

The key risk event of note in the global markets today comes in the US with the publication of August’s edition of the closely-monitored ISM Manufacturing sector survey.

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Economists forecast that the gauge of activity levels in this key sector of the American economy will show a slight decrease from July’s counterpart result, making for an interesting set-up.

Recent strong showing from economic statistics released in the States have altered investors’ predictions regarding the timing of the next interest rate hike from the US Federal Reserve.

With expectations low, there would appear to be a live possibility that the result will come out above the anticipated level – such an outcome will be likely to provoke a renewed bout of support for the US Dollar (currency:USD) – a move which would be likely to send the GBP USD exchange rate back down through the 1.6600 threshold once more.

Meanwhile, market participants won’t have to wait long for the next pointer for the Pound Sterling; the August edition of the Markit/CIPS Purchasing manager Index of the UK’s construction sector is due for publication at 0930hrs BST this morning.

Sterling is in need of a fillip following the damaging comments of last month from the International Monetary Fund (IMF). The leading organisation stated that it considered the Pound overvalued by as much as 10% and Sterling slid as a result.

Elsewhere, yesterday’s session saw the euro (currency:EUR) tumble to its lowest level against the US Dollar (currency:USD) for almost 12 months as investors continued to trim their exposure to the single currency over fears that the European Central Bank may be about to introduce Quantitative Easing. Jeremy Stretch of the Canadian Imperial Bank of Commerce observed earlier that his bank has been, ‘maintaining a bearish view on the euro for some time.’ He went on to observe that, ‘the presumptions in that, in terms of the deteriorating fundamentals and that the ECB will do more, seem to be coming together quite well. The path of least resistance is for a cheaper euro.’

Most economists agree and for this reason the forecast for the Pound to euro exchange rate remains POSITIVE GBP/EUR.

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