FX News Now: Spike Forecast for British Pound Euro GBP EUR Exchange Rate on Greece Referendum Result

July 6, 2015 - Written by John Cameron

STORY LINK FX News Now: Spike Forecast for British Pound Euro GBP EUR Exchange Rate on Greece Referendum Result

Pound Holds 1.41 against Euro, Greek Talks Ahead

With the leaders of major European nations scheduled to gather today to try and bring the Greek crisis to a close, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to experience extensive currency-market movement. The UK's GDP estimate for June will also be of interest to investors in the hours ahead.

Earlier...

GBP/EUR Expected to Hit Multi-Year High This Week

Analysts forecast that the Pound Sterling euro exchange rate will spike to a fresh 7 ½ year high during today’s session following yesterday’s make or break Greek referendum. Futures markets had been pricing in almost a 70% chance that the Greek people would vote in favour of the ‘Brussels Group’s’ latest proposal for economic reforms during the hours leading up to the vote. Such a result would allow Athens to unlock the next tranche of emergency funding which is so desperately needs in order to allow its economic system to continue to function.

Currency News Today: Grexit Expected on No Result in Greek Referendum

However, by the time the polls closed across the debt-addled Hellenic state, those same futures markets were predicting a 90% likelihood that the Greek people had rejected the EU / ECB / IMF’s latest proposal.

Greek PM Urges the People to Vote Against Austerity, Euro (EUR) Could Fall

The immediate future is now uncertain. Troika policymakers had been quick to bill the referendum as an in / out vote on Greece’s continued membership of the euroland. However, the nation’s mercurial Prime Minister Alexis Tsipras had other ideas during the lead-up to the popular ballot, billing the referendum as an opportunity for Greece’s downtrodden population to send Brussels a firm message. Tsipras stated yesterday as the Greek people headed for the polls that;

'No one can ignore the will of the people to live, to live with determination, to take its destiny into its own hands. I am certain that from tomorrow we will have broken a path for all the peoples in Europe. A path of return to the founding values of democracy and solidarity in Europe, sending a strong message of determination, not only to stay but also to live with dignity in Europe. Let us therefore make this act of strong will, this celebratory act of democracy, an act of determination for a better future for all of us, both in Greece and Europe. I am very optimistic.'

Foreign Currency Predictions - Euro (EUR) to Pound (GBP) and US Dollar (USD) Exchange Rate Movement Likely

It seems likely that Greece’s retail banks will remain closed for the foreseeable future and that at least two of the nation’s premier lenders and savings institutions will be nationalised by the ailing Athens administration. The contagion from Greece’s financial failure is forecast to hit France’s and Germany’s banks, which remain highly exposed to Greek bonds, particularly hard. The Pound Sterling euro exchange rate is predicted to settle above last week’s peak of 1.4309 which represented its highest level since 2007.

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TAGS: Daily Currency Updates Pound Dollar Forecasts Pound Euro Forecasts Forecasts