Best Exchange Rates: New 7 ? Year High Forecast for Pound Sterling to Euro Exchange Rate (GBP EUR)

May 12, 2015 - Written by John Cameron

STORY LINK Best Exchange Rates: New 7 ? Year High Forecast for Pound Sterling to Euro Exchange Rate (GBP EUR)

The Pound Sterling to euro exchange rate briefly broke back above the psychologically significant 1.4000 GBP EUR threshold during late trading yesterday as investors continued to buy up Sterling-denominated assets in the wake of the decisive result of last Thursday’s UK General Election. The pair broke to an intraday high of 1.4004 during the middle part of North American trading – the best conversion level for the GBP/EUR exchange rate since the final stages of last month.

Looking at the technical side of this move, momentum indicators strongly the Pound now appears to have built up a head of steam against the euro; the pair’s rapid improvement from its 3-month low of 1.3363, which it touched off during Election Day last Thursday, looks like it has not worked its way out just yet. However, consecutive closes above its near-term peak of 1.4050 will be required in order to confirm the forward momentum for GBP EUR.

Turning to the fundamental side of things, yesterday’s shift higher for GBP EUR came in spite of the announcement from Brussels, where the eurogroup of EU Finance Ministers were holding the latest in a long line of Greek debt crisis meetings, that the debt-addled Hellenic state had begun repaying the latest tranche of 750m debt interest to the International Monetary Fund. The news did little to abate concerns that Greece might be about to topple into a debt abyss. Fuel was poured onto these flames of fear when the Greek Finance Minister asserted that his nation might ‘run out of money’ within ‘a couple of weeks’ if a fresh bail-out deal was not arrived at. Analysts forecast that while these fears persist, a break higher to a new 7 ½ year peak of 1.4257 GBP EUR cannot be ruled out.

Elsewhere, the New Zealand Dollar (currency:NZD) was the other major mover on the day, with the Pound Sterling New Zealand Dollar exchange rate climbing to its highest level since April 2011 at 2.1240 GBP NZD. The shift higher was partly down to last week’s UK election result, but mostly attributable to analysts’ forecasts that the Reserve Bank of New Zealand will be cutting its Official Cash Rate more than once before the end of this year.

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