Pound Euro Exchange Rate Today: GBP/EUR Slumps as Euro Currency Prospers on Draghi Prediction

Modified: Thursday, 6 February 2014 15:27 BST - Written by Frank Davies

STORY LINK Pound Euro Exchange Rate Today: GBP/EUR Slumps as Euro Currency Prospers on Draghi Prediction

The Pound Sterling to euro exchange rate slumped to as low as 1.1973 GBP/EUR in the aftermath of European Central Bank President Mario Draghi’s press conference this afternoon. Significantly, the top man at the ECB predicted during his ‘face the press’ session that there would be no deflation in the eurozone in spite of the recent dip in the level of inflation and the single currency prospered as a result.

Draghi went on to observe that the level of lending by the eurozone’s retail banks is now stabilizing, providing further reason for optimism for investors holding euro-denominated assets and sending the Euro Dollar exchange rate up to as high as 1.3620 EUR/USD. The next key level of resistance for the pair comes at 1.3640 EUR/USD with a tame showing from tomorrow afternoon’s US Non-Farm Payrolls numbers potentially propelling the pair through this threshold.

Pound Sterling Gives Up Ground vs 16 Global Currencies

Elsewhere, the Bank of England was conspicuous in its lack of action this lunchtime, announcing that it will be holding its key lending rate at its current record low of 0.50% and maintaining its asset purchase scheme at £375bn. With no accompanying forward guidance statement, you would have expected the fall-out to be broadly Sterling-neutral. However, given the softer nature of UK data releases in recent days, the BoE’s apparent ‘laissez faire’ attitude served to spook market participants, ensuring that Sterling has given up ground against almost all of the other sixteen most-actively traded global currencies on the day.

Pound to Australian Dollar Exchange Rate Forecast to Drop Below Key 1.8 GBP/AUD Threshold

Looking ahead, tonight’s Asian session brings the release of a monetary policy statement from the Reserve Bank of Australia. The Aussie has registered strong gains against the Pound since Tuesday night’s surprise change of tone regarding its monetary policy. If Australia’s central bank backs up Tuesday’s suggestion that further domestic interest rate cuts are now unlikely, then look for the Pound Australian Dollar exchange rate (GBP/AUD) to drop below the key psychological threshold of 1.8000 before the weekend is out.

Relevant Pound Sterling / Euro Exchange Rates (As of: 15:30 GMT 06/02/2014)

The Pound Sterling to Australian Dollar exchange rate is trading down -0.48% at 1.82002 GBP/AUD.
The Pound Sterling to Euro exchange rate is trading down -0.53% at 1.19976 GBP/EUR.

The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.51% at 1.97473 GBP/NZD.
The Pound Sterling to US Dollar exchange rate is trading down -0.03% at 1.63197 GBP/USD.
The Euro to Australian Dollar exchange rate is trading up +0.05% at 1.51699 EUR/AUD.
The Euro to Pound Sterling exchange rate is trading up +0.53% at 0.83350 EUR/GBP.
The Euro to New Zealand Dollar exchange rate is trading up +0.02% at 1.64594 EUR/NZD.
The Euro to US Dollar exchange rate is trading up +0.5% at 1.36025 EUR/USD.

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TAGS: Australian Dollar Forecasts Euro Forecasts Euro Pound Forecasts Pound Austral Forecasts