Drop Forecast for Pound Sterling Euro GBP EUR Exchange Rate if Greece Deal is Reached

June 19, 2015 - Written by John Cameron

STORY LINK Drop Forecast for Pound Sterling Euro GBP EUR Exchange Rate if Greece Deal is Reached

Greek Deal Could See GBP/EUR Exchange Rate Drop, GBP/USD Exchange Rate Holding Gains

The clock is ticking and the stakes are getting higher. The news earlier today that the European Central Bank has extended its emergency line of credit to Greece’s beleaguered banking sector helped the Euro (currency:EUR) to improve against the Pound Sterling, briefly sending the GBP EUR exchange rate back down into the 1.3900s. However, comments from the Euroland’s policymakers soon saw GBP EUR reverse these gains.

The Pound Sterling to US Dollar (GBP/USD) exchange rate remained trending in the region of 1.58

President of the European Council Polish policymaker Donald Tusk led the charge, stating emphatically that, ‘the game of chicken needs to end and so does the blame game. This is not a game and there is no time for any games.’

Euro (EUR) Exchange Rate Volatile against Pound (GBP), US Dollar (USD) Amid Greek Uncertainty

He went to assert that the euroland’s leaders could not resolve the Greece problem on their own and that the responsibility of getting a deal in place is now largely down to the eurogroup of Finance Ministers. Tusk posited that, ‘we need to get rid of the illusion there will be a magic solution at the leaders level. The summit will not be a final step. There will be long detailed technical negotiations. Debt remains the job of Finance Ministers.’ Tusk rounded it all up by advising that, ‘We are close to the point where the Greek government will have to choose between accepting what I believe is a good offer of continuing support, or head towards default. At the end of the day it can only be a Greek decision and a Greek responsibility.’

Heated Negotiations Could Lead to Greek Exit from the Eurozone, Forex Movement Expected

It appears that Tusk’s ‘my way or the highway’ stance will become more prevalent amongst the euro area’s negotiator team as Greece’s ultimate deadline of the final day of this month approaches. Something’s got to give and it may well have to give on Monday when an emergency meeting of the eurogroup of Finance ministers convenes in Brussels. With Greece’s banks now having the liquidity to keep their branches open, a breathing space has been afforded the Athens negotiating team. If they use this to reach an agreement, then analysts forecast a return to the low 1.3000s for the Pound Sterling euro exchange rate GBP EUR.

The Euro/GBP exchange rate was trending in the region of 1.4009

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