Euro to Pound Sterling (EUR/GBP) Exchange Rate Weekly Roundup

May 4, 2015 - Written by Tim Boyer

STORY LINK Euro to Pound Sterling (EUR/GBP) Exchange Rate Weekly Roundup

Euro to Pound Sterling Weekly Roundup – April 27 to May 1

At the start of the week, the Euro remained under pressure against the Pound and other major peers as investors remained nervous over Greece’s debt negotiations. Euro finance ministers said at the end of the previous week, that Greece must present a full economic reform plan by early May in order to access any further funding. The Pound Sterling held its position at the 1.39 level against the Euro despite domestic data coming in below forecasts. The CBI business optimism index fell from 15 to 3.

On Tuesday, the Euro held onto gains against the broadly weakened US Dollar but remained softer against the Pound Sterling as uncertainty over whether Greece can reach a deal with its creditors continues to weigh. An uptick in violence in eastern Ukraine also put pressure on the currency, as investors grew jittery after Ukraine’s leaders said that they believe Russia is preparing to launch a broad attack on their country. The Pound meanwhile weakened briefly after data showed that the UK economy expanded at a far slower pace than forecast in the first quarter of 2015.

Midweek, an uptick in violence in eastern Ukraine also put pressure on the currency as investors grew jittery after Ukraine’s leaders said that they believe Russia is preparing to launch a broad attack on their country. The Pound Sterling advanced against its major peers on Wednesday as data released by Nationwide showed that UK house price growth increased by an annual rate of 5.2% in April. The currency shrugged off the previous session’s weaker-than-forecast GDP growth data as investors said that they were confident of a strong improvement in the second quarter of the year. As the session progressed, the single currency rallied on German inflation data.

On Thursday, the Euro hit a two-month high against the US Dollar and strengthened further against the Pound Sterling as the threat of deflation eased in Germany. Eurozone inflation figures also showed similar improvement. The move out of negative territory was significant for the region, as it indicates that the European Central Banks (ECB) €1 trillion quantitative easing programme is working. The Pound Sterling weakened against the bolstered Euro, as a lack of domestic data caused investors to look ahead to the UK general election.

The Euro continued to rally against its most traded peers on Friday and hit its best level in 10-weeks against the US Dollar. The currency advanced after Greece delivered stringent reform measures to its creditors. The concessions raised optimism that a deal will be reached between Athens and its creditors. The Pound weakened further following the release of disappointing Markit/CIPS PMI data, which showed that manufacturing activity in the UK fell to a 7-month low.

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