Pound to Euro Forecast Today - Break Back 1.2602+ Could Mean Positive GBP EUR Exchange Rate Predictions

September 9, 2014 - Written by John Cameron

STORY LINK Pound to Euro Forecast Today - Break Back 1.2602+ Could Mean Positive GBP EUR Exchange Rate Predictions

Foreign exchange analysts forecast that, in spite of the weekend Scottish referendum poll, the British Pound to euro exchange rate could head upwards. A break back above last week’s close of 1.2602 GBP EUR would lead to a positive conversion rate forecast for the pair.

The Pound Sterling (currency:GBP) stumbled yesterday, but by the final stretch of the North American equities session, the UK tender was trading only marginally down on the day against the euro (currency:EUR).

The GBP EUR exchange rate had started the week’s session on Sunday night a full cent below the level at which it stood at last week’s close. The ‘price gap’ lower signifies a strong move against a currency, so leading analyst took it as a sign that the UK unit was set to track sharply Southwards against the single currency. The middle part of European trading saw GBP EUR shift lower, touching a near term nadir of 1.2445 and although the pair significantly remained below its weekly opening level of 1.2502, the pronounced move against Sterling which had been mooted by some following Sunday’s shock Scottish Independence poll failed to materialise.

Continued weakness for the euro ensured that the day’s losses for GBP EUR were limited. The announcement that European Union sanctions against Russia will begin today drew a retaliatory statement from Moscow threatening similar trade embargos against the euroland. The threat of an economic Winter of discontent served to limit support for the single currency, and as evidence mounts that pro-Russian troops in Eastern Ukraine are failing to keep to the terms of last Friday’s ceasefire, the shift out of euro-denominated assets could be about to strengthen.

On the data front, yesterday’s weak whole of eurozone Sentix Confidence survey failed to engender any optimism regarding the future prospects for the euro area’s economy. A print of 1.4 was anticipated, so when the result of -9.8 was published, the single currency shipped further support.

Looking ahead, today’s session is a blank one for tier one eurozone data releases, so any movement for the Sterling euro exchange rate is likely to be driven by UK data sets. This morning’s UK Industrial Production Manufacturing Production and Trade Balance numbers have the potential to be market-moving. Meanwhile, the highlight of the day comes in the form of this afternoon’s NIESR Gross Domestic Product Estimate. The closely-monitored figure gives a three month rolling estimate of the rate of expansion of the British economy. Expect a print of anything above last month’s 0.6% to favour the Pound, sending the GBP EUR exchange rate higher. In such a circumstance, a move above last week’s closing level of 1.2602 for the pair, signifying a closure of the ‘window’ which the price gap lower at the start of this week’s session had opened, would send out a strong positive indicator for the pair.

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TAGS: Daily Currency Updates Euro Forecasts Euro Pound Forecasts Pound Eu Forecasts