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Euro to Pound Outlook: EUR/GBP Exchange Rate Weekly Round-up

December 21, 2014 - Written by Tim Boyer

Our Latest Euro (EUR) to Pound Sterling (GBP) Exchange Rate Report



gbp eur exchange rateAs the markets prepare to wind down for the Christmas break, the exchange rate markets experienced some odd patterns last week as investors prepare for the end of the month and the start of a New Year.

At the start of the week, the Euro was weaker against the Pound and other major peers due to concerns that the Eurozone is sliding closer into deflation territory and that the European Central Bank is edging closer to introducing more monetary easing measures in order to stimulate economic growth in the region. Also weakening the currency were growing concerns over the political situation in Greece as voting drew closer to elect a new Greek President. If Prime Minister Antonis Samaras fails to get his candidate elected then snap elections will be held, a vote that the current government is unlikely to win. The situation has the potential to reignite the Eurozone crisis.

On Tuesday, the Euro made gains against the Pound and other major peers after data released in France showed that the nation’s economy improved more-than-expected in December. A separate PMI out of Germany also offered support the single currency as it showed that manufacturing in the Eurozone’s largest economy re-entered expansion territory.

The Euro then went back on the retreat against most of its major peers due to Wednesday’s inflation figures increasing expectations that the European Central Bank will introduce a quantitative easing programme early next year. Inflation across the 18-member currency bloc slide to 0.3%, even further away from the ECB’s target rate of just under 2%.

On Thursday, Greek members of parliament failed to elect a president in their first round of voting on Wednesday evening. The failed vote means that Prime Minister Antonis Samaras has only two attempts left to get his preferred presidential candidate elected before snap elections that could destabilise the Eurozone will have to be called.
The Pound meanwhile advanced strongly due to data showing that retail sales in the nation surged higher in November thanks to the Black Friday sales.

As the week ended, the Euro remained softer against Sterling and other peers as Eurozone inflation data released earlier in the week continued to weigh upon sentiment towards the single currency. Further losses for the Euro were restrained however as data out of Germany beat expectations. The Ifo Institute said its business climate index for Germany rose to 105.5 this month from a reading of 104.7 in November.


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TAGS: Daily Currency Updates Euro Forecasts Euro Pound Forecasts

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