Forex News Now: Gains Forecast for Pound Sterling Euro Exchange Rate GBP EUR on Greek Developments

Modified: Friday, 12 June 2015 09:26 BST - Written by John Cameron

STORY LINK Forex News Now: Gains Forecast for Pound Sterling Euro Exchange Rate GBP EUR on Greek Developments

US Retail Sales, Employment Data Drives Exchange Rate Movement Today, US Dollar Fluctuates on Mixed Results

A raft of data from the States has dominated price action in the global currency markets during this afternoon’s session. Hopes were high for the latest set of weekly American jobs data following last Friday’s go-ahead Non-Farm Payrolls numbers, but investors holding Dollar-denominated assets were left disappointed with the both the Continuing Claims and the Initial Jobless Claims elements of the statistics, which showed at 2,265,000 and 279,000 respectively, missed target to the downside.

EUR/USD Exchange Rate Slides after US Consumer Spending Increases, Further FX Movement Forecast

The news saw the Euro US Dollar exchange rate drop back into the 1.1100s, with the world’s premier pair touching 1.1182 at one point. The relative weakening of the euro (currency:EUR) against the Buck manifested itself in higher rates of exchange for the Pound Sterling euro pairing which broke back above the 1.3800 threshold for the first time since 2nd June a short time ago.

The GBP/EUR exchange rate rallied to a high of 1.3807

Comments from the eurogroup of Finance Ministers provided a further drag on the single currency on the day, with Jeroen Dijsselbloem warning the markets earlier that a Grexit would be ‘very damaging for Greece’. Meanwhile Donald Tusk, the President of the European Council, was even more pessimistic, bleakly warning Greece that the time for negotiating was nearing an end and that decisions were now required. Tusk went on to assert that the day is nearing when someone has to say that ‘the game is over’. Such an outcome would be likely to propel the Pound Sterling euro exchange rate back into the 1.4000s, with a high potential that the pair would break to a fresh 7 ½ year high above 1.4257 GBP EUR.

Greek Unemployment Rises, Euro (EUR) Currency Comes Under Pressure This Week

Elsewhere, this afternoon’s news that the overall level of unemployment in Greece jumped to 26.6% last month heaped further pressure on the shared currency and could provide further fuel for GBP EUR’s near-term forward move. Looking ahead, the next risk event of note for the euro comes tomorrow morning in the form of the latest regional Construction Output data. A year-on-year print of 0.5% is anticipated – anything less and analysts forecast that the euro will ship further support against both the Pound Sterling and the US Dollar.

The Pound could extend gains against the Euro and advance to 1.3850

Pound Sterling to Euro (GBP/EUR) Exchange Rate Trends at 1.38 on Friday

Demand for the Euro fell further still on Friday as reports that the International Monetary Fund (IMF) withdrew its negotiators from Greece added to fears that the nation could default on its upcoming repayment and end up being expelled from the Eurozone. Both today's UK Construction Output and Eurozone Industrial Production figures could have cause additional GBP/EUR movement, but the situation in Greece is likely to dominate focus into the weekend.

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TAGS: Pound Euro Forecasts