This Week's EUR/GBP Exchange Rate Outlook and Currency Market Forecast - Euro Fluctuations Expected on Greek Developments

June 14, 2015 - Written by James Fuller

STORY LINK This Week's EUR/GBP Exchange Rate Outlook and Currency Market Forecast - Euro Fluctuations Expected on Greek Developments

ZEW Sentiment Surveys Could help the Euro Recoup Losses against the Pound and US Dollar

While the Euro remained trending lower against both the Pound (EUR/GBP) and US Dollar (EUR/USD) on Monday, the common currency could gain this week if ecostats for the Eurozone show improvement. Tomorrow's ZEW economic sentiment surveys will be among this week's most influential reports. Rising confidence in Germany and the Eurozone as a whole would be Euro supportive.

Earlier...

Euro to Pound Sterling Exchange Rate Weekly Roundup and Breaking Currency News: Sterling Struggles at the Beginning of the Week

The Euro to Pound Sterling experienced mixed trading throughout much of the week before settling into a weakening pattern by the end of it. Dominating sentiment towards the currency pair was Greece. Uncertainty as to whether a deal was near (or not) was the main driver of the Euro’s erratic movement.

The EUR/GBP exchange rate hit a low of 0.71995 this week

UK Growth Forecasts Lowered, GBP Exchange Rate Dips against EUR, USD

As the week got under way the Euro managed to make gains against the Pound as the UK currency was softened by a warning issued by Moody’s. The credit rating agency warned that a British exit from the European Union (EU) would be detrimental to the nation’s economy and could weaken its credit rating. Also putting pressure on the UK currency was the release of a report by the Confederation of British Industry (CBI) which showed that the group cut its growth forecasts for the UK economy.

Eurozone GDP Bolsters Euro (EUR) but Greek Uncertainty Keeps EUR/GBP Fluctuating

On Tuesday, the Euro made gains against the Pound as data showed that Eurozone GDP expanded at the rate forecast by economists. The region’s economy grew by 0.4% on a quarter-on-quarter basis and by 1% on a year-on-year basis. Optimism that a deal would be reached between Greece and its creditors also supported the currency. Further losses for Sterling were restrained, however, as the UK trade deficit narrowed in April.

Midweek, the Pound began to claw back earlier losses as French industrial production data came in below forecasts and UK industrial production data came in stronger-than-expected. The report showed that British production increased by 0.4% on a monthly basis, beating expectations for a rise of 0.1%. On an annual basis production rose 1.2%, more than the 0.6% rise expected by economists. Manufacturing production meanwhile was shown to have fallen by -0.4% on a monthly basis and rose less than expected on an annual basis. As the session progressed the Pound received a boost from the NIESR GDP estimate. The group revised up its GDP estimate for the last three months from 0.4% to 0.6%.

The EUR/GBP exchange rate achieved a high of 0.7385 this week

Euro Declines against Pound (GBP), US Dollar (USD) and Swiss Franc (CHF)

On Thursday, the Euro began to struggle as negotiations between Greece and its creditors showed no sign of a breakthrough. As the day progressed a number of observers warned that time is running out for Athens. The stalemate was so bad that the International Monetary Fund (IMF) withdrew its team from the talks.

GBP/EUR Currency Pair Trending at 1.38 Today - More Gains Forecast?

As the week came to a close the single currency weakened even further to allow the GBP/EUR exchange rate advance back to the 1.38 level. Industrial production in the Eurozone came in below forecasts whilst the Pound received a boost after the ONS upwardly revised the UK’s GDP figures for 2014 and the first quarter of 2015.

Looking ahead to next week, Greece will dominate sentiment towards the Euro. The longer the stalemate drags on for, the more likely the Euro will weaken.

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TAGS: Currency Predictions Daily Currency Updates Euro Forecasts