Weekly Pound to Euro Outlook - Today's GBP/EUR Exchange Rate Forecasts, Conversion Rates + Predictions 2014 2015

September 7, 2014 - Written by Tim Boyer

STORY LINK Weekly Pound to Euro Outlook - Today's GBP/EUR Exchange Rate Forecasts, Conversion Rates + Predictions 2014 2015

Pound to Euro Roundup At the start of last week, the British Pound Sterling (GBP) advanced close to its strongest conversion rate in two years over the weekend as growing concerns that open war could occur between Ukraine and Russia increased dramatically in the previous week.

Fears of the conflict dragging in the European Union were heightened after European Commission President Jose Manuel Barroso warned that the situation was edging closer to the point of no return.

Support for the Pound Sterling (GBP) continued as investors continued to speculate that the Bank of England would hike interest rates sooner than initially expected. The diverging fortunes of the UK and Eurozone economies have also lent support to the Pound.

The Euro (EUR) weakened against all of its major peers last Monday as concerns over a widening conflict in Ukraine increased and as the poor economic data releases kept on coming.

Data released on Monday confirmed that Germany’s economy contracted by 0.2% in the second quarter, increasing concerns that the wider Eurozone could slide into recession before the end of the year. Investors also raised their bets that the European Central Bank would introduce new monetary easing measures at its policy meeting.

The British Sterling then declined sharply midweek as concerns over Scottish Independence climbed.

A YouGov poll showed that the lead for the pro-Union campaign experienced a big cut, something that spooked the markets as it puts the referendum result in doubt. The lead for the No campaign was at six points, down from the 14 points measured in the middle of August and the 22 points seen early last month.

The Euro (EUR) declined to its lowest level in a year against the US Dollar as data highlighted the diverging strengths of the Eurozone and US economies. The single currency managed to make strong gains against the Pound however after concerns over Scottish Independence weighed heavily upon the UK currency.

The Pound saw little movement against its major peers as economists awaited the outcome of the Bank of England and European Central Bank interest rate decisions. The BoE left interest rates unchanged. The currency also remained under pressure due to concerns over the Scottish Independence vote due to be held on the 18th.

The Euro softened on Thursday against the Pound and other peers after Ukrainian President Petro Poroshenko backtracked on his talk that an end to the Ukrainian crisis could end. The confusion caused the Euro to give back its gains.

As the week ended, the Pound briefly surged back above the 1.26 level against the Euro due to the European Central Banks (ECB) surprise decision to cut interest rates to a new record low of 0.05%. Against the US Dollar, the UK currency declined to its lowest level since November last year. With no UK, centric data due for publication on Friday the Pound is likely to see movement because of Eurozone and US data.

The Euro declined to its lowest level in 14-months against several major peers after the European Central Bank unexpectedly cut its interest rate to record low of 0.05% and announced the introduction of additional stimulus measures. The ECB also cut its forecast for growth this year to 0.9% down from 1.0% previously.

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TAGS: Currency Predictions Daily Currency Updates Euro Forecasts