Pound Euro Exchange Rate: GBP/EUR Sitting Well Above 1.19, UBS Forecast Rate to Hit 1.22
The Pound Sterling may be a shade off colour on Monday morning; however it remains dominant over its European cousin:
The Pound to Euro exchange rate is 0.03 pct lower at 1.1941. GBP/EUR is now 2.65 pct higher than it was a month ago when we were quoting the rate at 1.16.
The Euro to Pound exchange rate is thus at 0.8374.
Please be aware that the above quotes are wholesale; your bank will charge a discretionary spread when passing on their retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here.
The euro is forecasted to decline yet further against the British Pound Sterling in coming sessions.
Gareth Berry at UBS says:
"Further selling pressure suggests more downside in the near-term. Support is at 0.8285 ahead of 0.8165. Resistance is at 0.8454."
For those looking at the above equations in GBP/EUR, Berry is forecasting GBP/EUR at 1.22.
Ahead, the British Pound is widely favoured to retain a positive bias.
"Last week saw the pound continue its bullish stance across the board, making further gains against all the major pairings. The fact there was little data to trade off seemed to not matter as various releases from Europe and the States gave investors enough to go on to keep their confidence in the British pound, allowing fresh highs of 5 months against the euro and US dollar," says Simon Eastman at Currency Index.
Key catalysts for the Pound this week include:
- Inflation data on Tuesday.
- Bank of England minutes on Wednesday.
- UK retail sales on Thursday.
- UK public sector net borrowing on Friday.
Euro Boosted by Events at the US Fed
However, ahead of any further rally in the British Pound we must account for the possibility of a return in Euro strength.
"Ahead of the FOMC meeting scheduled for later this week investors did not feel too brave and decided to stay on the sidelines. However, last night news about Lawrence Summers withdrawal has triggered a jump in the euro on expectations that chances for an early tapering are now slimmer," says Jonathan Sudaria at Capital Spreads in reference to the pro-Euro sentiment currently being witnessed on the currency markets today.
Ahead: Currency markets to fixate on Wednesday's Fed meeting
The next catalyst for further Euro strength comes on Wednesday.
"The major focus for the next two day will remain the Fed Wednesday meeting and we suspect that FX will settle in a relatively subdued trading range. On the docket today we have the ECB President Draghi speaking and expected news form the German electoral campaign," says Mazen Salhab at Swissquote Research.
In the US session we expected US Empire State Manufacturing Survey, Industrial Production, Capacity Utilization, Manufacturing Output and from Canada Net Foreign Investment