Pound to Euro Rate Forecast: Fears Mount for the EUR Currency

December 15, 2014 - Written by John Cameron

STORY LINK Pound to Euro Rate Forecast: Fears Mount for the EUR Currency

Shaky Euro Exchange Rate This Week?

As this week’s session in the currency markets gets underway, fears are mounting regarding the future of the euro (currency:EUR).

Greece in Trouble Again?

The news that Pierre Moscovici, the European Union’s Commissioner for Finance, is flying into Athens this morning, has served to ramp up investors’ concerns that the euroland’s perennial debt struggler Greece may be on the verge of a dramatic exit from the EU.

Greek Vote Vital to EUR

This week brings the first of three national votes in Greece which aim to elect a new Head of State by 29th December. The general consensus amongst political analysts is that if the Hellenic state has not selected a President by this date, then an exit from the European Union may swiftly follow. If no Head of State is chosen by the end of the month, then the Greek constitution would automatically trigger a General Election.

General Election Threatens Grexit

If recent opinion polls are correct, then any such General Election would be won by the nation’s Far Left opposition Syriza party, led by Alexis Tsipras.

Tsipras has not held back in his polemic over recent days, accusing Greece’s Prime Minister Antonis Samaras and the European Union of ‘fear mongering’.

The Syriza leader expanded on this theme during an interview yesterday, stating that the Greek government and EUR were instigating, ‘an operation whose only aim is to sow terror among the Greek people and MPs, and to thrust the country ever deeper into the poverty and uncertainty of the memorandum.’

Inflation Data Threatens Sterling

Meanwhile, the near-term performance of the Pound Sterling (currency:GBP) is likely to be to a large extent determined by tomorrow morning’s UK CPI inflation data for November. Given the sharp drop in the price of a barrel of crude oil over the past 6 weeks, it would appear likely that the price rise data will show a drop from last month’s annualised showing of 1.3%. Such a result would pile the pressure on the Pound.

Mixed Forecast for GBP EUR Exchange Rate

Looking at the technicals, a short term shift lower for Sterling against the euro, perhaps driven by a low showing from tomorrow’s British inflation figure, could send the GBP EUR exchange rate down to its September low of 1.2398.

However, if the potential for a Greek exit from the eurozone appears to be increasing as December draws on, the GBP EUR could track upwards towards its 2 ½ year peak of 1.2876.

The next significant level heading Northwards would then be close at hand – July 2012’s 6 and a bit year peak of 1.2894. Watch this space.

Euro Rates Today

The Pound to Euro conversion rate is +0.12 pct higher at 1.26298 GBP/EUR.
The US Dollar to Euro exchange rate converts +0.36 per cent higher at 1 USD is 0.80517 EUR.
The Swiss Franc to Euro exchange rate converts +0.02 per cent higher at 1 CHF is 0.83254 EUR.
The Canadian Dollar to Euro exchange rate is +0.29 pct higher with a conversion rate of 1 CAD equals 0.69573 EUR.
The Australian Dollar to Euro exchange rate is +0.92 pct higher with a conversion rate of 1 AUD equals 0.66472 EUR.

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TAGS: Currency Predictions Euro Forecasts Euro Pound Forecasts Pound Euro Forecasts