Weekly Forecast for Pound Euro Exchange Rate (GBP/EUR)

September 20, 2013 - Written by John Cameron

STORY LINK Weekly Forecast for Pound Euro Exchange Rate (GBP/EUR)

The Pound to Euro exchange rate (GBP/EUR) is currently trading down by 0.17% at 1.1832 GBP/EUR. The Euro to Pound exchange rate is currently trading at 0.8452 EUR/GBP.

The EURO has enjoyed a strong finish to the week, registering good gains against the other majors in the wake of the Fed’s surprise policy decision on Wednesday. Price action from the single currency in the aftermath of the FOMC’s no-vote to a trimming of QE affirms the euro’s credentials as a risk-sensitive tender. This means that relative levels for the single currency moving forward are likely to mimic those of the traditional high-yielding currencies, (AUD, NZD, ZAR).

Sunday’s German Federal Elections will determine the near-term direction of the eurozone’s unit. A swift and clear-cut outcome to the Teutonic popular vote will be likely to increase support for the single currency. However, with German election results still being determined by a proportional representation system, a clear-cut result is not a likely event.

The highlight of a sparse eurozone data schedule next week comes on Friday in the form of the latest German CPI inflation figures. As ever with euro area inflation, a higher than expected print will strengthen the euro. The single currency is expected to trade on a NEUTRAL footing in the meantime.

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TAGS: Currency Predictions Euro Forecasts Euro Pound Forecasts Pound Euro Forecasts