Renewed Move Higher Forecast for Pound Sterling Euro Exchange Rate GBP EUR

Published: Friday, 13 November 2015 08:30 BST - Written by Minesh Chaudhari

STORY LINK Renewed Move Higher Forecast for Pound Sterling Euro Exchange Rate GBP EUR

GBP to EUR Conversion Rate Predicted to Advance

The Pound Sterling (currency : GBP) shipped support against the euro (currency : EUR) during late trading yesterday following hard-hitting comments from the Head of the German central Bank.

At a time when the UK government is attempting to negotiate looser ties with Brussels, Jens Weidmann, President of the Deutsche Bundesbank, and a member of the European Central Bank’s governing council, issued a setpiece statement at a Paris university yesterday calling for a ‘comprehensive shift of sovereignty’ involving the introduction of a common fiscal authority for the euroland.

UK and Germany on Divergent Political Trajectories, 'Brexit' to Weigh on GBP

The European Union’s two major economies – the UK and Germany - now appear to be on vastly different political trajectories and the upshot may have a pronounced effect on the Pound euro exchange rate.

Comments from UK Prime Minister David Cameron earlier this week suggested that his negotiations with other euroland nations aimed at achieving a looser relationship with Brussels are not progressing well.

The British Premier hinted that if his team were not able to secure substantial concessions from Europe, then the UK’s ruling Conservative party might not necessarily support the ‘remain’ campaign in the ‘in / out’ EU referendum which must take place before the end of 2017.

Economists estimate that a ‘Brexit’ from the European Union would cause UK economic activity to slump by between 8 – 10% - an outcome which would see Sterling hammered in the currency markets.

Eurozone GDP to Provoke GBP EUR Volatility

The next steer for euro-watchers comes in the middle part of this morning’s European equities session with the publication of the latest whole of eurozone Gross Domestic Product data.

In relative terms, investors’ expectations are relatively high for the key statistic – a year-on-year print of 1.7% is anticipated for the figure which covers the three months to the end of September.

This would represent a significant improvement from Q2’s counterpart showing of 1.5%; however, given the soft tone of recent sectoral releases from the euroland, a decent showing from the latest GDP number is by no means guaranteed.

Many analysts therefore forecast a renewed shift higher for the GBP EUR exchange rate as the day unfolds.

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TAGS: Pound Euro Forecasts