Pound Euro Rates Today: Has GBP EUR Exchange Rate Bottomed Out?

Modified: Tuesday, 18 March 2014 14:11 BST - Written by Toni Johnson

STORY LINK Pound Euro Rates Today: Has GBP EUR Exchange Rate Bottomed Out?

It’s been a day of little movement for the Pound euro exchange rate (GBP/EUR) in spite of a lower than anticipated set of whole of eurozone inflation numbers for February, published earlier. The figures revealed that the rate of price rises in the Euroland has increased by only 0.7% last month compared with February 2013. This was mildly below analysts’ expectations of a print of 0.8%, suggesting that the prospect of deflation in the region is a more real one than European Central Bank President Mario Draghi suggested during his press conference earlier this month.

The Pound euro exchange rate briefly rose to 1.1985 during this morning’s European equities session, but fell back to 1.1933 a little later. As intraday trading ranges go, this was a very tight one. The pair now appears to be pausing while it decides which way to go next following the pronounced downshift which it experienced in the wake of the ECB’s latest policy decision. Tomorrow morning’s German ZEW Sentiment Index provides the pair’s next risk event of note – a print of above the anticipated 52.0 showing could send GBP EUR back through the psychologically key 1.2000 level once more.

Elsewhere, the prevailing mood amongst institution investors during today’s session has been firmly ‘risk on’, with London’s FTSE 100 index registering gains of 0.72% on the day, while Frankfurt’s benchmark Dax closed up by slightly more than 1.00% on the session. Buoyant levels of appetite for risk suggest that market participants remain relatively unphased by the continuing posturing between Ukraine’s EU-backed leadership and Moscow over the disputed Ukrainian region of Crimea. The West was quick to dismiss yesterday’s apparently emphatic vote in favour of rejoing Russia by the Crimean people as illegal, but Moscow appears equally as determined to accept the result of the popular ballot. The situation continues to carry a real risk of weakening the single currency at a stroke with any escalation of tensions also likely to have a debilitating effect on the relative values of the Australian, New Zealand and Canadian Dollars, (AUD, NZD, CAD).

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