Pound Euro: "The tables have turned and the euro is now dictating the GBP/EUR rate"
The pound to euro exchange rate is 0.3 pct down on last night's closing level at 1.1830.
The euro to pound exchange rate is at 0.8453.
The tables have turned in favour of the euro
Sasha Nugent at Caxton FX sums up the latest, and likely, action concerning the pound to euro exchange rate:
"The tables have turned and the euro is now dictating the GBP/EUR rate. The market does not seem to care about the UK Services PMI data and the euro has continued to push the GBP/EUR lower."
Euro strength: Draghi, PMI data
Driving the euro higher, according to Lloyds Bank Research, is the lack of any opposition to EUR strength from Draghi at the ECB press conference on Thursday.
"While there is nothing important enough on the calendar today to suggest this is likely to be broken, and we would expect some consolidation ahead of the weekend, this level will be in the market sights next week if there is no progress in the US Budget discussions," say Lloyds.
All-round sterling weakness
GBP weakened yesterday in spite of a strong PMI Services number and a good recovery in the employment sub-component.
Above: Pound Euro Heads Lower
"There is no obvious reason for GBP to weaken, but the levels at 1.6250 in GBP/USD and in particular 0.8333 in EUR/GBP (1.20 in GBP/EUR) are proving significant resistance/support in the short term," say Lloyds.
The EUR/GBP level in particular is looking tough to break and there may now be scope for a move up to the 0.85 area before the downtrend is resumed, even though we remain more positive about GBP’s prospects than the EUR over the medium term.