Pound Euro Exchange Rate (GBP/EUR) Forecast To Break 1.2000

Modified: Sunday, 15 September 2013 21:46 BST - Written by John Cameron

STORY LINK Pound Euro Exchange Rate (GBP/EUR) Forecast To Break 1.2000

The Pound Euro exchange rate (GBP/EUR) made a run at 1.2000 on Friday as market participants fretted about the state of Portugal’s finances. Weak eurozone inflation numbers later today will be almost certain to send GBP EUR back up through the 1.2000 level.

The Pound to Euro exchange rate (GBP/EUR) is currently trading down by 0.15% at 1.1934 GBP/EUR. The Euro to Pound exchange rate is currently trading at 0.8379 EUR/GBP.

The Pound Sterling soared to its highest level against the euro since 18th January, touching 1.1967 during the final part of Friday’s European equities session as investors expressed their concerns about the outcome of a visit from representatives of the IMF/ECB/EU Troika to Portugal which began over the weekend.

The delegation are carrying out a full audit of the state of the debt-addled Atlantic state’s finances amid market rumours which suggest that progress in paying down its sizable national debt has been slower than anticipated.

The IMF/ECB/EU visit was scheduled to take place in July, but Portugal’s government postponed it following the resignation of the nation’s highly respected Finance Minister Vitor Gaspar whose adherence to the Troika’s stringent bailout conditions had caused widespread unemployment whilst failing to make a dent in the size of his state’s spending deficit.

Portugal’s long-awaited visit from the men from the Troika was foreshadowed by Friday’s meeting of the eurogroup of eurozone Finance Ministers. Although the tone of the noises coming out of the Vilnius get-together was generally upbeat, with talk of improved economic indicators and positive GDP projections, the joint statement issued by the collected Finance Chiefs contained a stern warning to bailed-out eurozone states that they must stick to their spending targets.

This morning’s whole of eurozone Consumer Price Index inflation data ensures that investors holding the single currency will enjoy a lively start to the week. If the key price rise figures show at below the projected annualised 1.3% level, then the Pound Euro exchange rate (GBP/EUR) is forecast to break the 1.2000 threshold for the first time for eight months.

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