Euro to Pound Forex Exchange Rate Outlook - EUR GBP Bleak on Ukraine and Greece Woes

February 17, 2015 - Written by John Cameron

STORY LINK Euro to Pound Forex Exchange Rate Outlook - EUR GBP Bleak on Ukraine and Greece Woes

Yesterday’s meeting between the eurogroup of Finance Ministers and Greece’s radical Syriza-led government dissolved in acrimony after just three hours, sending the Pound Sterling euro GBP EUR exchange rate up to within a whisker of its 7 ½ year high.

The pair traded up to 1.3554 as Greece’s shaven-headed leather-clad Finance Minister Yanis Varoufakis passed his verdict on the current state of play. The Athens hardman will have raised the blood pressure of the EU / IMF / ECB ‘Troika’ which previously provided his nation with a €240bn bailout lifeline when he stated that –

- it is illogical to ask Greece to complete a plan which it rejects

- the market should not treat Greece's negotiation with the EU as a game

- that Greece will reject any measures that contribute to returning its economy to recession

- that it is it is ‘illogical’ to ask Greece to complete a plan it rejects


Meanwhile, the eurogroup of Finance Ministers, led by Jeroen Djisselbloem, reiterated that their position remains categorical – the current Greek bailout will remain in place and the only option for Athens is to seek an extension of this programme. Something has got to give and it’s got to give quickly, as Greece’s coffers will run dry at the end of this month without a fresh source of finance. In the meantime, analysts forecast that the Pound Sterling euro exchange rate is highly likely to break through to a fresh 7 ½ year high sooner rather than later.

Still, things could be worse. The latest Gross Domestic Product growth figures from Ukraine are expected to show that the troubled former Soviet state’s economy has contracted by almost 14% during the past twelve months. Such an outcome would provide a stark illustration of how the conflict between Ukraine’s army and Russian-backed militia in the eastern part of the nation is ruining Kiev’s shot at becoming a modern Westernised state. Perhaps that was the point of Russia’s policy of interference in the region. Either way, the development heaps further pressure on the single currency and the prospects for the euro to Pound Sterling exchange rate remain bleak.

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