Exchange Rates Forecast: Pound to Euro (GBP EUR) & Pound to Dollar (GBP USD) Predicted to Rise

Modified: Monday, 30 September 2013 09:36 BST - Written by Toni Johnson

STORY LINK Exchange Rates Forecast: Pound to Euro (GBP EUR) & Pound to Dollar (GBP USD) Predicted to Rise

The Sterling euro exchange rate (GBP/EUR) has headed northwards in early trading this week thanks to fears over the political situation in Italy. Meanwhile, The Pound Dollar exchange rate (GBP/USD) is also moving higher as investors fret about America’s debt situation.

The Pound to Euro exchange rate (GBP/EUR) is currently trading up by 0.18% at 1.1955 GBP/EUR. The Euro to Pound exchange rate is currently trading at 0.8365 EUR/GBP.

A bitter spending feud between Democrat and Republican lawmakers in the United States is casting a shadow over nearly all of the major global currency pairs as this week’s session gets underway. An angry President Barak Obama addressed Republican lawmakers on Friday afternoon, shortly after the European equities shut down, directly requesting that they should not ‘burn the house down because you haven’t gotten 100% of your way’. Obama went on to issue a stark warning that if America reneged on its existing debt commitments then it would have a ‘profound destabilising effect’ on the global economy.

The developments sent the Pound to Dollar exchange rate spiralling. The pair came within a fraction of a cent of a new 9 ½ month high at 1.6147 late on Friday and if US policymakers do not reach a near-term accord then the pair is predicted to head higher throughout this week’s session.

Elsewhere, the Pound euro exchange rate (GBP/EUR) registered good gains at the start of last night’s Asian session following the news that Italian President Giorgio Napolitano had held weekend crisis talks with the debt-troubled Mediterranean nation’s Prime Minister Enrico Letta. The emergency meeting was triggered by renegade ex-Prime Minister Silvio Berlusconi’s announcement that he would be withdrawing his ministers from the nation’s coalition government. The news leaves Italy effectively rudderless and the single currency is forecast to give up ground as a result.

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