Pound to Euro (GBP/EUR) Exchange Rate Forecast to Beat Recent Best 2014 Rates

September 23, 2014 - Written by John Cameron

STORY LINK Pound to Euro (GBP/EUR) Exchange Rate Forecast to Beat Recent Best 2014 Rates

GBP/EUR Rate Today: A weekend call to arms from the US Treasury Secretary Jack Lew has served to spook the markets rather than calm them during the first 24hrs of this week’s trading session.

The top man at the American treasury department made comments over the weekend calling for action from the euroland’s member states to boost aggregate demand in order to steer the region away from a potentially damaging bout of deflation.

- The pound to euro exchange rate is +0.3 per cent higher at 1.28153.
- The pound to dollar exchange rate is -0.15 per cent lower at 1.63007.
- The euro to pound exchange rate is -0.3 per cent lower at 0.78032.
- The euro to dollar exchange rate is -0.45 per cent lower at 1.27197.

Lew was speaking to a distinguished audience – the G20 group of finance ministers – who assembled in Cairns, Northern Queensland over the market shutdown.

His fears centred on potential political divisions within the European Union and he juxtaposed the current situation in mainland Europe with events in the US during recent years, stating that what was, ‘clear from the US experience is that the combination of taking action to boost demand in the short run and make structural changes for the long run is an important combination, and it shouldn't become a choice between the two’.

If these words were intended to assuage investors’ concerns that the European Central Bank might not be willing to go the whole hog with an all-out programme of Quantitative Easing, they failed in their aim. The headline FTSE 100 share index in London closed down by 0.94% on the day, while Frankfurt’s Dax gained slightly more than 0.50% on the session. Meanwhile, America’s broad-based S&P 500 had shipped almost a percentage point worth of its value by the middle part of the US equities session. The shift out of risk caused significant gains for the Pound Sterling New Zealand Dollar exchange rate (GBP/NZD), with the pair climbing to 2.0172 on the day, while the Sterling Aussie exchange rate jumped to 1.8454 GBP AUD during European trading. While risk remains out of favour, further gains would appear likely for the Pound against the Commodity Dollars.

Looking ahead, this morning’s German and whole of eurozone PMI surveys are likely to prove market-moving with the consensus expectation amongst analysts being for only a slight drop-off from last month’s results. A poor showing would be likely to send the Pound Sterling euro exchange rate up to a fresh two year high above the 1.2800 GBP/EUR threshold.

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