Pound to Euro (GBP/EUR) Exchange Rate Fails To Rise; AUD, NZD And CAD Forecast To Strengthen

Modified: Wednesday, 30 October 2013 18:26 BST - Written by Minesh Chaudhari

STORY LINK Pound to Euro (GBP/EUR) Exchange Rate Fails To Rise; AUD, NZD And CAD Forecast To Strengthen

The Pound euro exchange rate (GBP/EUR) has stubbornly refused to move higher in spite of weak German unemployment and inflation numbers, out earlier today. Meanwhile, the GBP AUD, GBP NZD and GBP CAD exchange rates could register losses later today if the US Federal Reserve announces a continuation of its $85bn per month Quantitative Easing programme.

Marginally weaker than anticipated German unemployment data, published earlier today, has failed to budge the Sterling euro exchange rate (GBP/EUR) by much. Although the overall level of joblessness in the eurozone’s premier economy remained at 6.9%, as per analysts’ expectations, the increase in unemployment of 2,000 workers during the past month acts as a reminder that Germany’s vast economy is not yet firing on all cylinders.

The Pound to Euro exchange rate (GBP/EUR) is currently trading up by 0.03% at 1.1682 GBP/EUR. The Euro to Pound exchange rate is currently trading at 0.8560 EUR/GBP.

Elsewhere in mainland Europe, this morning’s Spanish GDP data revealed a quarterly expansion of 0.1% during the three months to the end of September for the troubled Iberian economy. It’s too early yet to state that Spain’s recession is at an end as the counterpart Q2 figure showed at -0.1%, meaning that Q1 2014’s quarterly print will need to be non-negative in order to signal an end to Spain’s long-standing period of recession.

This afternoon’s session has brought the publication of Consumer Price Index inflation data in both Germany and the US. Significantly, both releases came out below economists’ expectations, suggesting that both the European Central Bank and the Federal Reserve are free to pursue their current ultra-loose economic policies into next year.

We will discover more regarding the US Federal Reserve’s intentions later today when the Bank’s FOMC announces its latest policy decision. With the partial US government shutdown still fresh in policymembers’ minds and renowned dove Janet Yellen expected to take over at the helm of the world’s leading central bank early next year, the Fed is likely to announce that it will continue with its Quantitative Easing programme at its current $85bn per month level. Such an outcome will be likely to trigger renewed support for the Commodity Dollars, sending the GBP AUD, GBP NZD and GBP CAD exchange rates lower.

Daily spot exchange rates mentioned in this article (updated 18:00 GMT):

Pound Sterling/Australian Dollar exchange rate is 1.69238 GBP AUD
Pound Sterling/Canadian Dollar exchange rate is 1.68028 GBP CAD

Pound Sterling/Euro Dollar exchange rate is 1.16758 GBP EUR
Pound Sterling/New Zealand Dollar exchange rate is 1.94978 GBP NZD
Pound Sterling/US Dollar exchange rate is 1.60338 GBP USD

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