Euro exchange rate forecast graph
The Pound to Euro exchange rate has today achieved a new one month-high against the Euro as per our expectations communicated ahead of the start of this week. Further gains above 1.
Pound to Euro Exchange Rate Forecasts + News |
The call for an initial target at 1. If the pair goes any higher we believe it may stall at around 1.
EUR/USD Exchange Rate
This is likely to prove difficult to breach due to incoming supply from traders selling the pair at this level. As such a pause is expected ahead of a break higher or a fading of strength and a shallow retracement back into the early 1. The Pound to Euro exchange rate rate is currently in a wave-e of the triangle, which normally have five component waves a-e , therefore, this could be the final wave. A break above the late February highs of 1. Momentum, as measured by the MACD in the bottom pane is also constructive, marginally supporting an upside breakout.
Alternatively, the pair could rotate at the level of the upper border and fall, breaking out to the downside instead, since this is a symmetrical triangle and these do not offer any clues as to the direction of the final break.
Ahead of the Easter weekend, the latest news from the UK economy has not benefited Sterling as it points to a slowdown in growth over coming months. The ONS reports that wage growth in the UK is now at 2. This implies that the squeeze on living standards is intensifying and this is bad news for an economy that has long been dependant on consumer spending.
The Bank of England will look at this data and most likely conclude the need to implement a pro-Sterling interest rate rises is not yet justified.
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Furthermore, data on hours worked shows the extra hours being put in by UK workers are not necessarily commanding higher wages. However, one would imagine there is another way of looking at the graph in that it potentially signals a pick up in wages in the future as extra hours worked will ultimately have to be met with wage rises in the future.
In any case, consumer spending should be supported by strong confidence, jobs growth, and supportive credit conditions," says Paul Hollingsworth, UK Economist at Capital Economics.
If this is correct then the Bank of England might have to anticipate rising wages will lead to higher inflation in the future which could prompt talk of an interest rate rise. However analyst Robert Wood at Bank of America Merrill Lynch Global Research says the lack of wage pressure in the UK confirms there is still plenty of slack in the labour market.
It appears that the big driver of the Pound at present is geopolitics and as such any impact to the UK currency from the data report could be muted. As we noted here , the Pound was a major beneficiary of a spike in nervousness amongst the investor community over the course of the past 24 hours.
The British Pound to Euro exchange was last quoted at 1. The US administration is increasing pressure on the Russians over their support for Syrian President Assad on one front, while pressuring North Korea on another front. The North Korean situation is arguably more volatile owing to the unpredictability of the regime in Pyongyang.
If China decides to help, that would be great. If not, we will solve the problem without them! Sandte points to an important dynamic in which the Pound is actually being favoured in conditions where markets are nervous. We have mentioned that the UK is looking to be more of a safe harbour with elections in France just around the corner. Markets have shown increased nerves towards European assets as far-left candidate Jean-Luc Melenchon muddies the playing field and creates a scenario where any one of the main four candidates can now win.
The US Dollar is also not finding its traditional safe-haven characteristics as investors buy safer US bonds which in turn sends the yield on those bonds down which lowers support for the Dollar.
The Pound has long been associated with risk as the uncertainties regarding Brexit loom large ahead - but these risks are well flagged and markets have had months to position accordingly. So with the Pound being a winner in times of increased risk sentiment, it goes that it will likely be a loser if the situation settles down.
Pound Sterling was seen outperforming its major rivals in mid-week trade following comments from a key Bank of England member. The weakness may not last, however, given most bank analysts see the Pound as more undervalued versus the Euro than it should be. An uncompromising technical assessment of the Pound suggests the period of stability seen against the Euro over recent weeks is transitory and some significantly lower levels could be tested.
With Brexit negotiations underway, the Pound is set to become increasingly prone to political headline risks. The news and information contained on this site is by no means investment advice. We intend to merely bring together and collate the latest views and news pertaining to the currency markets - subsequent decision making is done so independently of this website.
All quoted exchange rates are indicative. All Content by Pound Sterling Live. Data Currencies GBP Pairs EUR pairs AUD pairs USD pairs CAD pairs NZD pairs ZAR pairs.
Thursday, 13 April If it is, there is a high chance of a breakout higher once the wave finishes. This would be positive for Sterling on a longer-term basis. There are two geopolitical fronts investors will be watching over coming hours.
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