Euro to Pound Exchange Rate (EUR/GBP) Threatened by New Greek Crisis

Modified: Monday, 19 August 2013 09:43 BST - Written by Ben Hughes

STORY LINK Euro to Pound Exchange Rate (EUR/GBP) Threatened by New Greek Crisis

The GBP EUR exchange rate moved forward last week thanks to an alteration in the Bank of England’s policy. GBP ZAR is also riding high and may threaten its three year high if South Africa’s labour dispute reignites.

The Pound Euro exchange rate is currently trading up 0.02% at 1.1717 GBP/USD. The Euro Pound exchange rate is currently trading at 0.8585 USD/GBP.

The Sterling Euro exchange rate (currency : GBP EUR) ended last week’s session in the currency markets lodged firmly in the 1.1700s. The pair has enjoyed a marked renaissance over the past ten days, recovering from a brief incursion into the high 1.1300s to trade up to within 2c of its highest level since the middle part of January.

The near-term forward move for GBP EUR has largely been due to improved investor sentiment towards the Pound thanks to the Bank of England’s more proactive approach to credit expansion since new Governor Mark Carney took over the reigns at Threadneedle Street at the start of July.

Previous tests higher for the Pound Euro exchange rate during 2013 have been attributable to wobbles in investor confidence caused by fears that the eurozone’s long-running debt crisis might be about to rear its ugly head once more. This weekend’s market shutdown has provided renewed evidence to suggest that mainland Europe’s debt crisis may not yet be over as news emerged from Greece that Stelios Stavridis, the Chairman of the nation’s privatisation board, had been sacked after only four months in the job. Stavridis’ fatal error was to accept a ride in the private jet of an investor who had purchased a state-owned gambling company from the Greek Government. Stavridis was already under pressure when the claims of corruption emerged thanks to the snail-like pace at which the debt-addled Hellenic state’s assets were being transferred into private ownership.

The sorry tale of Stelios Stavridis highlights two central problems which still lie at the heart of the eurozone’s problems; the richer Northern nations suspect their profligate Southern partners of widespread corruption and a lack of willingness to stick to their stringent bailout plans. If these concerns persist into this week’s session, then expect the GBP EUR exchange rate to climb towards its key band of resistance just above the 1.1900 threshold.

Elsewhere, it was a year ago last week that violent clashes between mineworkers and the authorities at Lonmin’s Marikana mine caused the death of 34 mineworkers. The rumbling fall-out from this bloody event saw investors abandon the South African Rand, sending the GBP ZAR exchange rate spiralling into the 16.00s. The pair remains within striking distance of its 3-year high and any renewed labour unrest in the Southern African state could readily send GBP ZAR back up towards this level.

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