Pound to Euro Rate Today - GBP EUR Presents Best Buy Exchange Rate For Sterling Sellers

September 28, 2014 - Written by Frank Davies

STORY LINK Pound to Euro Rate Today - GBP EUR Presents Best Buy Exchange Rate For Sterling Sellers

The British Pound to Euro (GBP/EUR) exchange rate had remained relatively static at the end of last week, however, has today pushed beyond the best exchange rates seen in several years.

For those looking to sell Sterling in favour buying Euros, the conversion rates are the best since 2012.

So where is the Pound and the Euro right now?

- The pound to euro exchange rate is +0.29 per cent higher at 1 GBP converts as 1.28353 EUR.
- The pound to dollar exchange rate is -0.21 per cent lower at 1.62070.
- The euro to australian dollar exchange rate is -0.85 per cent lower at 1.44407.
- The euro to pound exchange rate is -0.29 per cent lower at 0.77910.
- The euro to dollar exchange rate is -0.5 per cent lower at 1 EUR equals 1.26269 USD.

The Pound Sterling has been sensitive to geopolitical developments that may see the UK enter into another conflict with Iraq.

Currently, it is expected that UK Prime Minister David Cameron will win the support of parliament to send UK forces into Iraq to conduct airstrikes on Islamic State militants. Cameron stated: ‘I have requested that Parliament be recalled to debate the UK response to the Iraqi government’s request for support against ISIL [Islamic State of Iraq and the Levant].’

Pressures on the Pound to Euro Exchange Rate

The European Central Bank (ECB) recently announced its latest plan to inject money into the economy – Targeted Long Term Refinancing Operations (TLTRO). Unfortunately, the plan to kick-start the 18-nation Euro area by lending cheap money to banks in order to encourage small business loans flopped. The ECB had estimated that up to 400 billion Euros would be borrowed; however, only 82.6 billion was called for. Some economists believe that December will see a higher demand for the cheap loans when the measure is offered again. One trader commented: ‘The market is clearly disappointed with last week’s take-up. But in December, we might see at least twice the amount.’

The ECB is desperately attempting to trigger an uptick in Eurozone inflationary levels—an area the currency bloc has struggled with for some time. Moreover, with the threat of deflation growing and the ECB’s stimulus measures so-far failing to revive the economy, many economists speculate that the central bank will be forced to enter into a period of sovereign bond buying known as quantitative easing.

Meanwhile, the Pound has seen the effect of heightening political issues in Iraq and Syria. Friday will be a significant day for the GBP to EUR exchange rate as parliament’s decision could send UK forces into the Middle East. If the government does decide to begin air strikes, they are expected to materialise extremely quickly. The Iraqi government appealed to major countries for assistance in eliminating Iraqi extremists in an attempt to care for its civilian population. To increase action to Syria will require further discussions and another vote in parliament.

Foreign Secretary Phillip Hammond commented: ‘We’re absolutely not ruling anything out. But at the moment what we’re proposing is air strikes in Iraq. If there was any suggestion of going further then there would have to be another debate.’ The Royal Air Force is expected to undertake airstrikes following Cameron gaining support today. Cameron’s previous call for action in the Middle East came last year when he asked for parliament’s permission to bomb Syria—an occasion that saw Cameron voted down. The Prime Minister had appealed to Labour for their support before recalling parliament this time to gain confidence that MP’s would back the decision.

Upcoming Domestic Data Could Affect GBP to EUR

Monday will see the release of UK Net Consumer Credit, Net Lending Secured on Dwellings and Mortgage Approvals reports. Meanwhile, the Euro may feel the effects of the German Consumer Price Index—the main measure of inflation—which is presently expected to remain at 0.8% in September on a year-on-year basis. Moreover, any further developments in the Middle East situation could place pressure on the Pound to Euro exchange rate. The outcome of Parliament’s decision may cause a softening of Sterling as the UK becomes involved in another conflict with Iraqi extremists.

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