Best Pound Euro Exchange Rate as GBP EUR Records New 12-Month High; Further Sterling Upside Forecast

Modified: Thursday, 9 January 2014 15:38 BST - Written by Tim Boyer

STORY LINK Best Pound Euro Exchange Rate as GBP EUR Records New 12-Month High; Further Sterling Upside Forecast

The Pound euro exchange rate has seen the best GBP EUR rate in 12 months as it spiked to its highest level since 11th January 2013 during yesterday afternoon’s session. The Sterling Euro rate had loitered below the 1.2100 GBP/EUR threshold for most of the day but took off when New York opened, moving from 1.2092 at 1500hrs GMT all the way up to a fresh 12-month high of 1.2133 just after the London close. The move up to this level eclipsed the previous range-topping rate of 1.2119, hinting that a new uptrend is now in place for GBP EUR.

The break higher for GBP EUR was driven by a generalised shift in favour of the UK tender ahead of this afternoon’s Bank of England policy announcement driven by market whispers that the BoE’s decision may be accompanied by a go-ahead forward guidance statement confirming that British interest rates may be on their way up sooner rather than later.

The real interest for this afternoon will come in the form of the European Central Bank’s latest policy announcement and the press conference from ECB President Mario Draghi which follows. Analysts are not anticipating another cut to its key lending rate from the ECB; however such a move would not come as a complete bolt out of the blue following recent comments from Draghi. A cut to interest rates from the ECB would surely send the GBP EUR exchange rate up into the middle part of the 1.2000 to 1.3000 region in short order.

Perhaps a more likely source of upside for GBP EUR comes when ECB President Mario Draghi addresses the assembled gentlemen of the press at 1330hrs GMT today. With eurozone inflation data earlier this week suggesting that the rate of price rises in mainland Europe is dropping rapidly towards zero, Draghi is under pressure to re-inflate the eurozone economy. Don’t rule out an announcement of the ECB’s own version of QE aimed at achieving this goal. Such a development would similarly send GBP EUR shooting higher.

Current Pound Sterling & Euro Exchange Rates Today (09/01/2014 11:00 GMT)

The Pound Sterling to Euro exchange rate is trading down -0.21% at 1.20913 GBP/EUR.
The Euro to Pound Sterling exchange rate is trading up +0.21% at 0.82704 EUR/GBP.
The US Dollar to Euro exchange rate is trading down -0.28% at 0.73476 USD/EUR.
The US Dollar to Pound Sterling exchange rate is trading down -0.07% at 0.60768 USD/GBP.
The Canadian Dollar to Euro exchange rate is trading down -0.46% at 0.67764 CAD/EUR.
The Canadian Dollar to US Dollar exchange rate is trading down -0.18% at 0.92225 CAD/USD.

The Australian Dollar to Euro exchange rate is trading down -0.35% at 0.65272 AUD/EUR.
The Australian Dollar to US Dollar exchange rate is trading down -0.06% at 0.88834 AUD/USD.

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