Developments in the EU referendum debate have remained a primary influence on the British pound to euro conversion rate in recent days, with the potential for uncertainty to spill over into the single currency.
To the shock of foreign exchange markets today, the British pound to euro exchange rate has seen a fresh rally after the latest EUR referendum news boosts sterling.
Today's GBP/EUR spot rate is seen to be trending 0.89pct stronger than yesterday's close, pushing towards the best conversion levels of 2016.
The latest poll from IPSOS MORI offered encouragement to the Pound (GBP) on Wednesday, with markets reacting bullishly to the news that the ‘Remain’ camp had 55% support to the ‘Leave’ campaign’s 37%.
Thus, in spite of mixed wage growth data, the Pound Sterling to Euro (GBP/EUR) exchange rate trended strongly higher.
Leaders from Britain Stronger in Europe and Vote Leave have both been giving public addresses today, although the sterling-euro seemed to strengthen. See today's update.
George Osborne joined forces with Ed Balls and Vince Cable to warn that a Brexit would be a ‘one-way ticket to a poorer Britain’, while Boris Johnson repeated his claim that a Brexit would free up money for the NHS.
The second revision of the Eurozone’s first quarter GDP proved somewhat mixed for the Euro exchange rates (EUR), as growth was revised lower but nevertheless outpaced both the US and the UK on the quarter.
In spite of Germany offering some measure of reassurance, with an unexpectedly strong level of economic growth, the euro to dollar exchange rate was inclined to weaken ahead of the weekend, in part due to stronger US data.
With the Bank of England (BoE) and IMF warning of the potential negative consequences of a vote to leave the EU, boosting bets that voters will opt to remain, the Pound Sterling to Euro (GBP/EUR) exchange rate consequently trended higher.
Other Pound Sterling / Currency Exchange News
Latest Pound/Euro Exchange Rates
On Friday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The live inter-bank GBP-GBP spot rate is quoted as 1 today.
The live inter-bank GBP-USD spot rate is quoted as 1.237 today.
FX markets see the pound vs swiss franc exchange rate converting at 1.126.
NB: the forex rates mentioned above, revised as of 19th 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.
GBP to EUR Exchange Rate Forecast
Weaker Chinese data prompted an upturn in safe-haven demand at the start of the week, as concerns over slowness within the world’s second largest economy weakened the appeal of higher-risk assets.
In something of a twist on the usual ‘Brexit’ debate, ratings agency Fitch cautioned that European economies could suffer hardship in the event of a ‘Leave’ campaign victory, noting that:
‘Negotiating the terms of the UK’s exit could exhaust the EU’s time and energy and open up new fronts of disagreement. Brexit could shift the centre of gravity of the EU, making it more dominated by the eurozone core, poorer, more protectionist and less economically liberal. If the UK were to thrive outside of the EU, it might encourage other countries to follow suit.’
While this failed to particularly weigh on the Euro on Monday morning the suggestion is nevertheless likely to raise greater concern in the future, particularly if Greece does not meet the deadline to enable the Eurogroup to sign off on its first bailout review.
Pound Sterling (GBP) Exchange Rates Weakened as CBI Lowers Growth Forecast
Confidence in Pound Sterling (GBP) diminished somewhat at the start of the week in response to the latest report from the Confederation of British Industry.
The CBI slashed its growth forecast for the UK economy from 2.3% to 2.0% in 2016, commenting that uncertainty centred on the upcoming EU referendum was prompting businesses to put off investment and spending.
As a result the Euro to Pound Sterling (EUR/GBP) exchange rate strengthened, in spite of a general lack of supportive Eurozone data on Monday.
UK CPI, ECB Comments to Provoke GBP/EUR Exchange Rate Movement
Greater volatility is anticipated for the GBP/EUR exchange rate on Tuesday, however, as the UK’s latest Consumer Price Index figures are expected to indicate a slowing in domestic inflationary pressure.
Inflation is forecast to have dipped from 0.4% to 0.3% on the month in April, an indication of weakness that will likely encourage investors to push back their bets for a BoE interest rate hike further.
Comments from European Central Bank (ECB) chief economist Peter Praet could undermine the appeal of the single currency, meanwhile, if the policymaker indicates that the central bank remains open to the possibility of further easing.
British Pound Exchange Rates See Mixed Results vs US Dollar, Euro Today
Despite a weaker-than-expected UK Consumer Price Index the Pound (GBP) remained on an uptrend against many of the majors on Tuesday morning.
The latest polls seemed to point towards an increasing lead for the ‘Remain’ campaign this led to an increase in demand for the Pound, on hopes that the UK will vote to stay in the EU.
The Pound has been fairly flat against the Euro of late, owing to recent inflation rate news.
Sterling’s relatively poor performance today has been caused by falling inflation for April. Tomorrow morning will bring the announcement of UK unemployment, claims and earnings results, at least some of which have had positive forecasts assigned.