Pound to Euro: Negative Comments Forecast to Boost GBP-EUR Exchange Rate

April 26, 2015 - Written by John Cameron

STORY LINK Pound to Euro: Negative Comments Forecast to Boost GBP-EUR Exchange Rate

Pound Sterling to Euro Exchange Rate Forecast

Friday’s session on the foreign exchange rate markets was billed as D-Day for the euro (currency:EUR) and there has been significant price action for euro-denominated pairs as a result.

In the end, the deadline for Greece to present to the eurogroup of Finance Ministers a comprehensive list of economic reforms has passed without any development, adding to the impression that there is little appetite to kick Greece out of the euro just yet.

However, eurozone policymakers did have some stern words for Greece at today’s eurogroup get-together at Riga, Latvia. Austria’s Finance Minister Hans Jörg Schelling lead the way, warning the debt-addled Hellenic state that the awkward stand-off between Greece and its creditors, ‘can’t continue like this’. He went to assert that ‘no plan B was discussed’, at today’s meeting. The markets responded by sending the GBP EUR exchange rate higher. The pair had been languishing below the 1.3900 threshold during early trading today. However, GBP EUR had recovered to trade up to as high as 1.3990 a short time ago. Consecutive closes above the 1.4000 threshold would ring a distinctly positive note for the pair moving forward, in spite of next month’s UK General Election.

German Chancellor Angela Merkel struck a more conciliatory tone today, advising that she wants a ‘swift conclusion’ to the situation and reminding all parties that it was ‘in everyone’s interests’ to come to a workable arrangement. However, not all of the euroland policymakers present were as go-ahead as the Teutonic leader. Jeroen Dijsselboem, the eurogroup chief, was perhaps the least pessimistic of those present, stating that ‘big, big problems’ need to be overcome before a resolution could be reached between Greece and her creditors. He went on to assert that,

‘A comprehensive and detailed list of reforms is needed... and a comprehensive deal is necessary before any disbursement can take place,’ before summing up the situation...
‘we are all aware that time is running out.’

Analysts forecast that these words could weigh down the euro exchange rate moving forward.

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