ECB Decision Sends Pound to Euro Exchange Rate to 1.1189, Will GBP/EUR Hold Here?

December 8, 2016 - Written by Ben Hughes

STORY LINK ECB Decision Sends Pound to Euro Exchange Rate to 1.1189, Will GBP/EUR Hold Here?

Pound Euro Exchange Rate Rally Extends Article 50 Best After Draghi's Policy Change Interpreted as Taper

• The Pound to Euro exchange rate today (09/12/16): 1.18765.
• The Euro to Pound exchange rate today: 0.84200

The Pound Euro exchange rate has risen considerably today, advancing from a daily low of 1.16 to a new high of 1.18.

UK news has been thin on the ground, with the main focus resting on Wednesday evening’s Commons vote, that saw a majority approve triggering Article 50 in late March of next year.

This vote did come with a condition, however, which was that MPs would be allowed to see the Government’s plans for leaving the EU. Given that a ‘Hard Brexit’ is still a possibility, the Pound is expected to continue reacting sharply to any announcements that come from this field.

GBP EUR Exchange Rate Predicted to Rally if October Trade Stats Match Forecasts

One of the last UK data releases of the week will arrive on Friday morning, consisting of the October trade balance result. As of writing, this was expected to show a drop in the current deficit from -5.2bn to -3.4bn.

Also out around the same time will be the Q3 construction orders result, which is set to show a slowdown with a move from 7.5% to 5.1% on the year.

The last scheduled news likely to have an impact will be the annual October construction output figure, which is set to reprint at 0.2% on the year.

Euro Exchange Rate Slide after ECB’s Draghi Extends QE

The Euro (EUR) has flopped against the Pound (GBP) and fared poorly in a number of other pairings today, in the wake of the European Central Bank (ECB) interest rate decision.

The last of 2016, the decision was for another rate freeze at 0%. Of greater interest to investors, however, has been the quantitative easing period, which has been extended.

This the reason behind the Euro’s drop, as instead of tapering off bond buying as some had been hoping, the practice has instead been dragged out for nine more months at €60bn per month.

Euro Pound Exchange Rate Forecast: German and Irish Stats to Close Off Week’s Data

The next major Eurozone economic announcements will arrive on Friday morning, consisting initially of Germany’s trade balance figures for October. On the month, a reduction in the surplus is in store from 24.4bn to 20.2bn.

Following this will be France’s industrial production print for the same month, which has been more optimistically predicted to rise from a previous negative of -1.1% to 0.6%.

The last major Eurozone contributions will be Ireland’s Q3 GDP growth results, which are expected to rise considerably on both the quarter and the year.

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TAGS: Currency Predictions Euro Pound Forecasts Pound Sterling Forecasts