Euro to Pound Currency Forecast - EUR GBP Lows as Euro on Back Foot on Exchange Rate Markets

September 28, 2014 - Written by Minesh Chaudhari

STORY LINK Euro to Pound Currency Forecast - EUR GBP Lows as Euro on Back Foot on Exchange Rate Markets

The Euro to Pound forex exchange rate pairing spent another week on the back foot on the currency markets as a string of economic data reports and comments by European Central Bank President Mario Draghi weighed upon the single currency.

At the start of the week, the Euro experienced mixed trading against its peers but remained close to multi month lows against its major peers. The single currency then regained some ground against the US Dollar and was edging higher against other peers after European Central Bank (ECB) President Mario Draghi said that he would not sit back and wait for newly announced stimulus measures to take effect.

The Pound was holding above the 1.27 level against the Euro and was firmer against the US Dollar as the currency continued to find support from the result of last week’s Scottish Referendum vote. With not much in the way of market, moving data due for the Pound over the course of the week the currency was vulnerable to events from elsewhere.

Midweek, the Euro was able to make gains against the US Dollar but was little changed against the Pound despite data showing that the Eurozone’s Composite output index which combines the output from both manufacturing and service sectors fell to a nine-month low last month.

The Pound was little changed on Wednesday against its major peers due to a lack of domestic market moving economic data releases. The currency did come under some pressure from risk aversion as British Prime Minister David Cameron built a case for the UK to join in combat operations against the Islamic State.

As the week ended, the Euro softened back towards a two-year low against the US Dollar and Sterling as poor German consumer climate data weighed upon the single currency. The data added to concerns over the health of the region’s economy.

The GFK Consumer Confidence report showed that confidence dropped from a reading of 8.6 to 8.3. The comments made by ECB president Draghi continued to weigh as investors raised their bets that the central bank could be getting closer to introducing a

The Pound meanwhile softened against the US Dollar and other safe haven assets as investors raised their bets that the UK parliament will vote in favour of committing the nation to war in Iraq. All three major party leaders are expected to back the RAF launching airstrikes against the Islamic State. Further losses were restrained after Bank of England Governor Mark Carney said that interest rate hikes are getting closer.

Euro to Pound Exchange Rate Regaining Losses ahead of German Inflation and Confidence

The Euro to Pound Sterling exchange rate saw gains on Monday, recouping some of the losses seen last week.

The direction taken by the EUR to GBP currency pairing may be influenced by German Inflation Rate figures as well as UK Mortgage Approvals and Mortgage Lending.

Moreover, Eurozone Business Climate, Consumer Confidence, Economic Confidence and Industrial Confidence statistics will show the current outlook for the 18-nation economy.

In the coming months confidence figures may begin to reflect the new stimulus measures introduced by the European Central Bank.

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: American Dollar Forecasts Currency Predictions Daily Curre Forecasts