Pound to Euro ?Fantasy Currency Trader? - Forecasting GBP EUR Will Trend Higher

February 4, 2015 - Written by John Cameron

STORY LINK Pound to Euro ?Fantasy Currency Trader? - Forecasting GBP EUR Will Trend Higher

On 25th Sept 2014, our Fantasy Currency Trader column advised that the British Pound to euro conversion was a BUY and suggested that readers should use a block of GBP10,000 to purchase euros from a then-current conversion rate of 1.2783 EUR.

How has the Pound to euro exchange rate trade played-out up to this point?

The Pound to Euro exchange rate today is trading 4.50% higher at 1.3358 GBP/EUR. The move higher for GBP EUR since the original recommendation means that the original suggested stake of £10,000 would now be worth £10,450.00, making a profit up to this point of £450.

The euro (currency:EUR) has suffered a double blow since the original ‘Fantasy Currency Trader’ euro-focused column of last Autumn. Last month’s landslide Greek election victory by the radical left-wing Syriza party hit the single currency hard. The subsequent round of horse-trading by the debt-addled Hellenic state’s staunchly anti-austerity leadership has seen investors abandon EUR-denominated assets. The single currency was already reeling by the time the news from Athens emerged following the European Central Bank’s announcement that it will be embarking upon a round of all-out Quantitative Easing in March which will ultimately total €1.14 trillion.

GBP EUR spiked to a 7 ½ year high of 1.3504 on 25th January during the immediate aftermath of the Greek election result. In truth, the single currency looked overbought at this level and GBP EUR rapidly retraced back to 1.3171 during yesterday’s session. The move was more than simply technical in nature – investors had been re-assured at the more conciliatory tone of the European Union’s regarding Greece’s demands to relax its bailout terms.

The near-term move higher for GBP EUR saw it convincingly eclipse its previous range-topping rate of 1.2894 last month. Analysts forecast that if Greece continues to act as the region’s ‘problem child’, and with the ECB’s large scale sovereign debt purchase scheme starting in earnest next month, the pair has the potential to break upwards towards the 1.4500 level where it spent a considerable time during the 2005 – 2007 period.

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TAGS: Euro Forecasts Euro Pound Forecasts Fantasy Currency Trader Forecasts Pound E Forecasts