Pound Sterling to Euro Exchange Rate Crashes after US Jobs Slump

June 2, 2016 - Written by Frank Davies

STORY LINK Pound Sterling to Euro Exchange Rate Crashes after US Jobs Slump

Sterling has dropped off against the Euro in a major way today, on account of the latest poor US jobs data sending the single currency soaring.

The Pound has appreciated notably against the Euro today, owing to the latest ECB news offering little support for investors.

GBP/NZD Exchange Rate Declined despite Falling Milk Powder Prices

The latest GlobalDairyTrade auction results proved to be a mixed bag as far as holders of the New Zealand Dollar (currency : NZD) were concerned. Adopting a ‘glass half full’ approach, the increase of 3.4% in the overall auction hammer price to US$2,329 provided producers across New Zealand with reasons for optimism.

However, on the downside, the news that the hammer price for New Zealand’s number one export – Whole Milk Powder (WMP) – had edged lower by 1.7% to US$2,205 compared to the last results of a fortnight ago, came as a blow.

The New Zealand Dollar still managed to end yesterday’s European session up by 0.93% against the Pound Sterling (currency : GBP), in spite of the patchy dairy auction results.

The Pound once again lost ground against the Kiwi thanks to concerns that this month’s European Union referendum might be a lot closer than was previously anticipated.

GBP/EUR Exchange Rate Trending in the 1.2800s

Elsewhere, the Pound euro exchange rate briefly slipped back into the 1.2800s late yesterday. Europe’s premier currency pair had been changing hands in the 1.3200s GBP EUR earlier this week as investors priced in a high perceived likelihood of a ‘Remain’ vote on 23rd June. Now those same market participants are not so sure.

Further movement is forecast for the Pound Sterling euro exchange rate later today when the European Central Bank (ECB) makes its latest monetary policy announcement.

No change on interest rates is expected from the euroland’s reserve bank and it is generally accepted that there is no scope to increase the €80 bn per month worth of Quantitative Easing which it is committed to on an ongoing basis.

As ever, the tone of the rhetoric contained in ECB President Mario Draghi’s post-decision press conference is likely to determine price action for the shared currency in the aftermath of the announcement. Given that euroland inflation remains in negative territory, this is forecast to be euro-negative.

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TAGS: Euro Forecasts Euro Pound Forecasts New Zealand Dollar Forecasts Pound Euro Forecasts Forecasts