Euro Pound Exchange Rate Forecasted to Decline: EUR/GBP is a Sell, Even if Carney Talks Sterling Lower

In late afternoon trade in London we see the Euro to Pound exchange rate 0.18 pct lower on a day-to-day basis; 1 EUR converts into 0.8417 GBP.

The Pound to Euro exchange rate is at 1.1880.

Please Note: The above are spot market quotes; your bank will affix a discretionary spread to the figures when passing on a retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.

Ahead of tomorrow's important Inflation Report Hearing we see the pound sterling has settled down somewhat.

However, should there be any fall in the Pound to Euro exchange rate in the wake of Carney's appearance at the hearing then we could be faced with a good opportunity to pick up some Pounds.

Kathy Lien at BK Asset Management forecasts the Euro will continue struggling against the British Pound Sterling:

"We are looking for euro weakness against the GBP and the NZD.  This morning's U.K. unemployment report was strong with jobless claims falling more than expected and the unemployment rate dropping from 7.8% to 7.7%.

"Persistent improvements in the U.K. economy will make it difficult for Bank of England Governor Mark Carney to convince investors that the outlook for the U.K. is grim.  

"84 cents is a very important support level for EUR/GBP that we expect to be broken in the medium term with a potential move down to 82 cents for the pair.  If Carney remains dovish, we would view that as an opportunity to sell EUR/GBP at a higher level."

Sterling is a winner in a lacklustre session of currency trading

Turning to market sentiment we see the British Pound has provided much of today's excitement thus far.

Joe Manimbo, Senior Market Analyst at Western Union says:

Sterling was the winner in an otherwise lacklustre session. The pound rose to seven-month highs after unemployment in Britain fell to 7.7% in the three months to July, a step closer to the Bank of England’s key 7% threshold to consider a rate increase.

"The latest drop in unemployment marked the lowest level since September–November 2012. Other gauges of joblessness also beat expectations, with the monthly unemployment claim count shrinking by 32,600 in August, more than 10,000 fewer than expected.

"Sterling has also ridden the rally of market optimism that has been fuelled by steady signs of stabilisation in China and constructive developments with the crisis in Syria."