Pound To Euro Exchange Rate (GBP EUR) Forecast To Gain If Tomorrow?s Data Disappoints

Modified: Wednesday, 29 May 2013 18:11 BST - Written by David Woodsmith

STORY LINK Pound To Euro Exchange Rate (GBP EUR) Forecast To Gain If Tomorrow?s Data Disappoints

This morning’s session brought a double blow for the euro. The first strike was provided by the latest set of German unemployment figures which showed a significant rise in the level of joblessness in the eurozone’s number one economy. Analysts had been anticipating a slight rise of 5,000 in the overall level of unemployment in the Teutonic state, so the increase of some 21,000 sounded loud warning signals for the region’s leadership.

Those alarm bells increased in volume later this morning when the OECD announced that it was slashing its 2013 growth forecast for the eurozone. The widely-respected organisation now forecasts that economic activity in mainland Europe will shrink by 0.6% this calendar year as the seventeen nation union begins to creak under the weight of heavy austerity measures. The OECD also announced at the same time that it was cutting its GDP growth forecast for the UK down to 0.8%. Although this is well below the level which Britain’s coalition government would desire, it is still a relatively strong prediction in comparison to what the OECD envisages for the eurozone during 2013.

Surprisingly, the euro has held up well so far today, in spite the bad news from Germany and the commentary from the OECD. The Pound to euro exchange rate (currency : GBP EUR) peeled back to as low as 1.1630 earlier on and the euro to US Dollar exchange rate has made healthy gains making a run at the 1.3000 level.

In light of today’s developments in Europe, tomorrow morning’s whole of eurozone Consumer Confidence survey will be particularly closely-watched. Analysts are anticipating an increase in the overall reading to 89.4, up from last month’s 88.6. Anything less than this could see any pent up negativity towards the single currency unleashed, sending the GBP EUR exchange rate back up towards its key level of resistance at 1.1900.

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