Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: 1.3 Predicted Sooner?

November 21, 2014 - Written by John Cameron

STORY LINK Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: 1.3 Predicted Sooner?

Support for the euro (currency:EUR) has slumped during this morning’s trading session, sending the euro Dollar exchange rate down to as low as 1.2413 EUR USD, while the Pound euro exchange rate has tracked higher to 1.2610 GBP EUR.

Here are the latest currency conversions today:

The Pound to Euro exchange rate today is converting +0.85 per cent higher at 1.26168 GBP/EUR.
The US Dollar to Euro exchange rate (USD/EUR) is +0.96 pct higher at 0.80493.
The Australian Dollar to Euro conversion rate is +1.91 pct higher at 0.70047 AUD/EUR.

Euro Rate Today: Draghi Comments Sink EUR

The shift out of euro-denominated assets has been driven by comments contained in a speech by European Central Bank supremo Mario Draghi to a Frankfurt banking conference earlier today.

The headline-grabbing line in Draghi’s set-piece statement saw the ECB President assert that, ‘it is essential to bring back inflation to target and without delay.’

The market took this as a covert signal that the euroland’s reserve bank will be looking to extend its asset purchase programme to encompass all-out Quantitative Easing involving the bulk purchase of sovereign debt sooner rather than later. Some analyst have inferred from the comments that this will be before Christmas.

Australian (AUD) and New Zealand Dollar (NZD) Exchange Rates Gain On ECB Expectations

Draghi’s words have altered the relative value of the single currency, but they have also had a marked effect on the Commodity Dollars, with the prospect of further ‘easy money from one of the world’s leading central banks has seen appetite for risk soar, with the euro area’s bourses faring particularly well.

Frankfurt’s Dax and Paris’s Cac 40 have both gained the best part of 2.0% on the session.

The move into risk has seen the Australian Dollar (currency:AUD) and the New Zealand Dollar (currency:NZD) both record sustained gains.

The comments sent the GBP AUD and GBP NZD exchange rates down to 1.7970 and 1.9724 respectively.

Euro Forecast: Rabobank Predicts Further EUR Losses

Rabobank thinks that the single currency will continue to weaken into the medium term; the Dutch investment bank’s foreign exchange strategist Jane Foley stated earlier that, ‘the euro will go progressively lower.

Draghi is continuing to apply this level of urgency about needing to boost inflation and the implication of that, once again, may be that he is a proponent of potentially using full-blown quantitative easing.’

Many analysts are now forecasting that the Pound euro exchange rate will breach the psychologically significant 1.3000 level sooner rather than later.

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TAGS: Currency Predictions Euro Forecasts Euro Pound Forecasts Pound Euro Forecasts