Euro EUR Exchange Rate Forecast Remains Negative Despite Inflation Data Revision

November 17, 2015 - Written by Minesh Chaudhari

STORY LINK Euro EUR Exchange Rate Forecast Remains Negative Despite Inflation Data Revision

Poor Japanese Gross Domestic Product Weighs on JPY

The latest Japanese Gross Domestic Product data led the way on Sunday evening and the upshot did not please investors holding the Japanese Yen (currency : JPY).

Analysts had been anticipating a print of just below zero from the annualised Q3 result; the showing of a year-on-year -0.8% therefore came as a severe blow to Yen-holders.

Support for the Japanese tender dropped on the news as market participants factored-in the evidence that Asia’s second economy still hasn’t escaped its long-standing economic funk.

GBP to JPY Conversion Rate Breaks 187.0000

The Pound Sterling Yen exchange rate edged higher from the lower part of the 180.000 – 190.000 range which it inhabited last week to break into the 187.000s as a result and economists suggest that there could be more downside to come for the Japanese tender.

Marcel Thieliant of Capital Economics explained that many analysts, ‘remain convinced that more stimulus will eventually be needed, and now believe that the January meeting is the most likely venue for its announcement.’

The promise of more Quantitative Easing from the Bank of Japan is forecast to suppress the Yen for months to come.

Eurozone Inflation Revised but EUR Continues to Struggle as Paris Attacks Weigh

Meanwhile, yesterday’s session brought the announcement of an upward revision to a key eurozone data set which was published earlier this month.

The EU’s official statistics agency Eurostat initially found that the pace of price rises remained unchanged in the euroland last month, but yesterday’s session saw this figure increased to a year-on-year 0.1%.

Although marginal, this upward revision was considered significant by economists as it suggests that price inflation has returned to continental Europe and that the European Central Bank’s Quantitative Easing programme is having its desired effect.

However, the news failed to help the euro (currency : EUR) improve against the Pound Sterling and analysts forecast that there could be further losses to come for the shared unit.

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