Pound Euro Exchange Rate Forecast (GBP EUR) To Gain On German Inflation Data

Modified: Tuesday, 7 January 2014 10:11 BST - Written by Minesh Chaudhari

STORY LINK Pound Euro Exchange Rate Forecast (GBP EUR) To Gain On German Inflation Data

This morning’s session brought the worst possible start to the week for the Pound Sterling (currency: GBP), with the publication of a tame set of December services sector data from the British economy. Analysts had been expecting the latest Purchasing Manager Index survey of the combined tertiary sector of the UK economy to show a slight improvement from November’s showing of 60.0. When the figure printed at 58.8, suggesting a cooling of the level of growth in this key area of Britain’s economy, the Pound suffered a pronounced wobble.

The Pound Sterling to Euro exchange rate is trading down -0.05% at 1.20360 GBP/EUR. The Euro to British Pound exchange rate is trading up +0.05% at 0.83084 EUR/GBP.

The disappointing PMI number represented the lowest showing for activity levels in the UK services sector since the middle part of last year, giving investors the impression that improvement which was apparent in the British economy throughout 2013 is now beginning to run out of momentum. The tame tertiary sector figure was to some extent mitigated by a business confidence survey from leading UK retail bank Lloyds, which revealed that optimism amongt the UK business community currently stands at its highest level since 1994.

Pound to Euro Slips to a Low of 1.2001 GBP/EUR, Pound Australian Dollar/NZ Dollar Edge Down.

The positive assessment of conditions from Lloyds ensured that the intraday losses for Sterling were not excessive; the Pound euro exchange rate slipped to a low of 1.2001 on the day, while the Sterling Australian Dollar (GBP/AUD) and Pound New Zealand Dollar (GBP/NZD) exchange rates has edged downwards to 1.9756 since the market re-opened.

The euro did not have the greatest of sessions itself today following the release of German CPI inflation figures which revealed that the rate of price rises in the eurozone’s premier economy dropped to an EU harmonised 1.2% in December from November’s showing of 1.6%. The lower than anticipated level of German price inflation leaves the door well and truly open for the European Central Bank to explore a further loosening of its monetary policy during coming months. Any further cuts to its key lending rate from Europe’s central bank would surely send GBP EUR up into the middle part of the 1.2000 – 1.3000 region sooner rather than later.

Key Euro Exchange Rates (As of: 07/1/2014 10:00 GMT)

The Euro to Australian Dollar exchange rate is trading up +0.54% at 1.52811 EUR/AUD.
The Euro to Canadian Dollar exchange rate is trading up +0.22% at 1.45630 EUR/CAD.

The Euro to British Pound exchange rate is trading up +0.05% at 0.83084 EUR/GBP.
The Euro to New Zealand Dollar exchange rate is trading up +0.1% at 1.64607 EUR/NZD.
The Euro to US Dollar exchange rate is trading down -0.01% at 1.36281 EUR/USD.
The Euro to South African Rand exchange rate is trading up +0.25% at 14.52919 EUR/ZAR.
The US Dollar to Euro exchange rate is trading up +0.01% at 0.73378 USD/EUR.

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TAGS: Australian Dollar Forecasts Currency Predictions Euro Forecasts Eur Forecasts