Pound Sterling Euro Exchange Rate GBP EUR Gains Forecast to be Curbed

Published: Wednesday, 2 December 2015 13:00 BST - Written by Tim Boyer

STORY LINK Pound Sterling Euro Exchange Rate GBP EUR Gains Forecast to be Curbed

GBP to EUR Conversion Rate Declined Today despite Poor Eurozone Inflation Data

The Pound euro exchange rate (GBP / EUR) has sunk during today’s session in spite of the publication of worrying economic statistics in the euroland.

Analysts had been anticipating that the initial estimates of eurozone Consumer Price Index inflation would show that the pace of price increases in continental Europe has risen slightly last month; when the headline November CPI inflation figure once again printed at a relatively lowly year-on-year 0.1% euro-holders’ hearts sank.

Pound Sterling to Euro Exchange Rate Dropped to an Intraday Low of 1.4136 Today

Most investors only consider the straight CPI inflation number, but central bankers also take a close interest in the ‘Core’ version of this key inflation gauge – a measure which does not includes cyclical food and energy costs.

This month’s official Eurostat figures revealed that core euroland prices increased by a lower than expected year-on-year 0.9% during November - a result which is certain to elicit interest from the European Central Bank’s policymakers who make their latest monetary policy announcement tomorrow lunchtime.

A deepening, and possibly an extension, of the ECB’s current €60bn per month Quantitative Easing programme is on the cards if most analysts are to be believed and today’s data would appear to make such an outcome more likely.

The Pound Sterling euro exchange rate slumped to an intraday low of 1.4136 GBP EUR in spite of the data from Europe; however an announcement of further policy loosening from the ECB tomorrow would be almost certain to send the pair higher once more.

Soft British Construction and Manufacturing Output Weighs on Sterling Demand

Today’s meek performance from the Pound were largely driven by another disappointing Purchasing Managers Index (PMI) survey, out this morning.

Yesterday saw the November PMI manufacturing survey disappoint to the downside, while this morning’s session brought a below par showing from last month’s edition of the UK PMI Construction sector survey come in below expectations.

Analysts forecast that if tomorrow morning’s PMI Services sector survey also shows at below the anticipated level, then any upside for the GBP EUR exchange rate on the day could be curbed.

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TAGS: Euro Forecasts Pound Euro Forecasts Pound Sterling Forecasts