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Currency Market Predictions: Fresh 7 ? Year High Forecast for Pound Sterling to Euro Exchange Rate if Greek Deal Fails

July 9, 2015 - Written by John Cameron

GBP/EUR Exchange Rate Falls as Greece Presents Reforms



The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3840 on Friday as Greece presented its creditors with reform proposals. With the odds of the Hellenic nation remaining within the Eurozone now considerably higher than they were this time last week, the Euro gained on a number of its most-traded currency counterparts. The latest developments will be keenly attended to in the build up to Sunday's gathering of Eurogroup officials.

Earlier...

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The euro (currency:EUR) has weakened during today’s trading session as Germany’s policymakers hardened their stance towards the Greek debt problem. German Finance Minister Wolfgang Schäuble led the way, confirming the International Monetary Fund’s early-week assessment that Greece needs a debt haircut in order to bring its financial commitments down to a manageable level. However, the Moneyman from Berlin went on to assert that such a debt write-off was not possible as it would infringe European Union regulations.

Pound Sterling to Euro (GBP/EUR) Exchange Rate Movement Forecast, Greece in Focus



Meanwhile, Schäuble also had a view on the potential for a so-called ‘re-profiling’ of Greece’s debt commitments, which would involve altering the term of the Aegean nation’s debt, (an action similar to that taken in 2012 when the debt-addled Hellenic state last hit acute financial difficulties). Schäuble coldly observed that there remains ‘little leeway’ for such a move under European Union regulations this time around and his words heaped further pressure on the down at heal single currency. The upshot saw the Pound Sterling euro exchange rate claw back some of the sustained losses which it incurred yesterday; the pair climbed to an intraday high of 1.3960 GBP EUR a short time ago.

Failure to Strike Deal Could See Pound Sterling to Euro (GBP/EUR) Exchange Rate Advance to 2015 Best This Week



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However, the Athens negotiators are not without friends amongst the eurozone delegation. Reports emerged earlier that Greece is receiving assistance in drafting its proposals for economic reform which the Brussels group has demanded. Schäuble’s French counterpart, Michel Sapin, stuck a more conciliatory tone when he commented at a press conference held earlier in Frankfurt that, ‘balanced budgetary strategies are necessary and efforts are needed to boost investment.’ He went on to state that, ‘we must find the right balance between indispensable budgetary consideration and boosting growth.’

Something’s got to give by the end of Sunday’s emergency eurogroup summit. Analysts forecast that an announcement late on Sunday that Greece has left the eurozone, even if this is billed as a temporary exit, will be almost certain to send the Pound Sterling euro exchange rate through to a fresh 7 ½ year high above last month’s peak of 1.4309.

The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3940

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TAGS: Euro Forecasts Euro Pound Forecasts Pound Sterling Forecasts

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