Pound to Euro Falls From 1.27 - Further Gains Forecast for GBP/EUR on Exchange Rate Markets

October 22, 2014 - Written by John Cameron

STORY LINK Pound to Euro Falls From 1.27 - Further Gains Forecast for GBP/EUR on Exchange Rate Markets

Currency News UK presents our latest British pound to euro forecast, exchange rate outlook/news and GBP to EUR predictions.

Investors have focussed their attention on policy measures and potential future actions from the world’s major central banks during recent months.

Speculation regarding the next move from the US Federal Reserve, Bank of England and the European Central Bank have shaped the fortunes of the US Dollar (currency:USD), Pound Sterling (currency:GBP) and the euro (currency:EUR) respectively.

Before we take a further look below, let's first see where the EUR stands in today's FX markets:

The Pound to Euro exchange rate today converts -0.23 per cent lower at 1 GBP is 1.26429 EUR.
The US Dollar to Euro conversion rate is +0.18 pct higher at 0.78795 USD/EUR.
The Swiss Franc to Euro exchange rate is +0.08 pct higher at 0.82905 CHF/EUR.
The Canadian Dollar to Euro exchange rate is +0.07 pct higher with a conversion of 1 CAD equals 0.70092 EUR.
The Australian Dollar to Euro rate today is converting +0.37 per cent higher at 0.69220 AUD/EUR.

Don't forget if you are waiting to find a better currency rate for a international payments abroad, then you're best bet is to set up your future rate order with a foreign exchange broker!

Swiss Bank Comments Improve Appetite For Risk

However, one European reserve bank has kept a relatively low profile during recent months - the Swiss National Bank, (SNB) - but yesterday’s session brought some interesting comments from a senior policymaker at Switzerland’s lender of the last resort.

Fritz Zurbruegg delivered a set piece speech in Geneva yesterday afternoon and he used the opportunity to stress his Bank’s determination to retain its current ultra-loose policy stance which has seen it maintain a minimum floor of 1.2000 on the EUR CHF for the last three years.

Zurbruegg stated that, ‘there’s no discussion, we will with utmost determination make sure that the minimum exchange rate is not questioned, either with unlimited purchases of foreign currency, and if necessary we will take further measures immediately.’

He went on to posit that, in spite of the strong move against the franc since 2011 which has seen the Pound Sterling to Swiss Franc exchange rate settle above the 1.5000 threshold, he still believes that, ‘we have a franc that is highly valued.’

ECB Rumours Fuel Shift Into Risk

The suggestion from such a senior decision-taker at the SNB that there may be further extraordinary monetary policy measures to come added to a burgeoning ‘risk-on’ trading environment during late trading yesterday.

The shift out of safe-haven assets saw the broad-ranging S&P 500 index in Chicago register its highest daily gain since October 2013.

Rumours that the European Central Bank was about to begin buying up corporate bonds added to the exuberant mood amongst equities traders on the day.

Economists forecast that the Pound Sterling (GBP) will record strong gains against the Australian Dollar (currency:AUD), New Zealand Dollar (currency:NZD) and Canadian Dollar (currency:CAD) during the remainder of the week if the buoyant mood in the market continues.

Soc Gen Predicts Looser ECB Policy

Kit Juckes of Societe Generale commented yesterday that, ‘we’ll eventually get quantitative easing from the ECB.

Whether he buy government bonds or corporate bonds or asset-backed securities or gets rates more negative than they are, it’s not clear that any of that’s going to make bank lending pick up.’

However, any of these actions would send the Pound to euro exchange rate (GBP/EUR) Northwards.

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