EUR Rate Today - GBP to Euro Rallies as BoE Limits Mortgages, EUR Dollar Falls

June 24, 2014 - Written by John Cameron

STORY LINK EUR Rate Today - GBP to Euro Rallies as BoE Limits Mortgages, EUR Dollar Falls

Tuesday saw the British Pound Sterling (GBP) weaken from its strong 2014 euro and dollar exchange rate levels. However, the British currency managed to recoup losses after the Bank of England' published its Financial Stabilty Report, which saw the pound to euro shoot back above earlier 2014 highs of 1.25 EUR and the pound dollar 1.7 USD.

The Pound Euro exchange rate is 0.39% per cent higher on the day at 1.25098 GBP/EUR.

Earlier in the week, comments from Bank of England Governor Mark Carney had a pronounced effect on the GBP exchange rates, so this morning’s appearance in front of the UK parliamentary Treasury Committee by the BoE chief was eagerly awaited by currency market participants.

Carney did not disappoint, adding further uncertainty to the ongoing debate regarding the timing of the next UK interest rate hike.

The Top Man at Threadneedle Street responded to accusations that his Bank had acted like an ‘unreliable boyfriend’ in making and breaking promises over future interest rate movements by confirming that future policy announcements would be ‘driven by data’.

Peter Kinsella, strategist at Commerzbank, also observed that, ‘it’s notable that Carney focused on the lack of wage growth.’

The implication of this is that an increase in Base Rate may yet be a little way off from the Bank of England. The Pound lost ground as a result, sending the Pound down to its lowest level against the Euro since last Thursday at 1.2461 earlier.

If GBP EUR slides below this level then there is little recent technical support to stop the pair heading down to the 1.2300 threshold.

Losses for the Pound would surely have been of a greater magnitude on the day were it not for this morning’s German IFO sentiment survey which showed that the Business Climate, Current Assessment and General Expectations of the closely-monitored survey all came out below analysts’ expectations.

Elsewhere, the US Dollar has pushed ahead against the Pound Sterling during this afternoon’s session, sending the GBP/USD exchange rate down to as low as 1.6979.

The continued improvement for the Buck against the British Pound was fuelled by highly encouraging US property market data, out earlier. May’s US New Home Sales figures showed a jump of 18.6% against April’s counterpart number.

The positive print hints that the US Federal Reserve may be in a position to hike its key interest rate sooner rather than later – a move which economists forecast would send Pound to Dollar higher.

Relevant Pound, Dollar & Euro Exchange Rates Today - 26/06/2014

The Pound Sterling to Euro exchange rate is trading up +0.39% at 1.25098 GBP/EUR.
The Pound Sterling to US Dollar exchange rate is trading up +0.24% at 1.70224 GBP/USD.
The Euro to Pound Sterling exchange rate is trading down -0.39% at 0.79937 EUR/GBP.
The Euro to US Dollar exchange rate is trading down -0.15% at 1.36072 EUR/USD.

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