The British Pound to euro rate (GBP/EUR) continues to plunge today with any gains from the positive GDP data outweighed by the worrying UK Steel industry. Sterling did manage to take advantage of a weaker US dollar, but where's next in the latest exchange rate forecasts?
Demand for the euro exchange rates (EUR) versus the British pound (GBP) and the American dollar (USD) has been bolstered after both the German and Eurozone Consumer Price Indexes showed an improvement on the year in March.
While the Eurozone as a whole remains under deflationary pressure this sign of modest improvement has helped to drive the GBP/EUR exchange rate lower.
The British pound has been a poor prospect over the entirety of the day, with UK steel remaining a draw on investor interest.
Most recently, it has emerged that a quick solution to the problem is likely off the cards, given that the House of Commons is in recess until April 11th.
Latest Pound/Euro Exchange Rates
On Friday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.857
At time of writing the pound to euro exchange rate is quoted at 1.167.
Today finds the pound to us dollar spot exchange rate priced at 1.247.
FX markets see the pound vs australian dollar exchange rate converting at 1.911.
The GBP to NZD exchange rate converts at 2.1 today.
NB: the forex rates mentioned above, revised as of 26th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
Ahead of the German Consumer Price Index report, the GBP/EUR exchange rate failed to hold onto its earlier gains.
However, in spite of turmoil within the UK steel industry, the pound to dollar conversion rate has remained on a strong uptrend heading into Wednesday afternoon.
The bulk of UK news has been dominated by the UK’s steel sector today, with the recent advances potentially being triggered by developments in this area.
These have mainly focused on Business Secretary Sajid Javid, who has cut short a visit to Australian in order to return to the UK and address the issue.
A trade-weighted measure of Sterling has dropped 5.4% on the year so far, amid concern that Britain will vote to leave the common market on June 23rd.
Pound Sterling (GBP) exchange rates have made some recent gains, however, thanks to traders taking advantage of the low trade weighting.
Political uncertainty has far from abated, however, with EU referendum jitters likely to weigh on demand over the coming months.
Pound Sterling (GBP) Exchange Rate Sees Positive Movement Today, but Will it Last?
There was some positive movement for the Pound on Tuesday, as the UK returned to work following the Easter Bank Holiday. The GBP/USD exchange rate recovered from lows around 1.41 last week to peak above 1.44 overnight, while the Pound was also 1% higher versus the Euro.
When it comes to predicting the result of Britain’s referendum, the telephone surveys showed a lead for the “Remain” side are probably closer to the mark than the polls conducted online, a study has found. Internet polls are all missing key data and could be considered wider of the mark.
Matt Singh who wrote the report and called last year’s general election correctly, said that both polls are flawed but said the phone surveys are closer to the correct picture. Effectively it’s too close to call but although the “out” campaign has the momentum currently, it’s far from certain that the UK will leave the EU.
The level of uncertainty over the result will only increase over the next 2 ½ months and we can expect the Pound to weaken again in the build-up to the referendum. Options markets indicate traders are predicting the Pound will fall further against all major currencies in the next three months, even though the Bank of England dampens speculation of an interest rate cut.
Bank of England (BoE) Outlook May Give Sterling Exchange Rates a Temporary Boost
Futures contracts project no increase in borrowing costs this year, which has also weighed heavily on the Pound but the lack of a cut and the UK remaining in the EU would likely see a strong recovery.
Political uncertainty always has the potential to hurt Sterling and the infighting within the ruling Conservative party has had a deep impact in recent weeks.
The Bank of England still maintains that the next likely direction for interest rates is up rather than down and a weaker Pound does have an upside risk to inflation but even then, the BoE are likely to hike anytime soon. The Bank’s Financial Policy Committee said officials were ready to support financial stability amid the risk of a UK exit, which is at the top of its list of near-term domestic threats.
Data Released 30th March
EU 10:00 EC Business Climate (March)
EU 10:00 EC Economic Sentiment (March)
- Industrial / Services / Consumer
GER 13:00 Preliminary HICP (March)