The British Pound vs euro exchange rate plummeted to fresh 16 month low this week, trading at lows of 1.2419, while sterling also lost ground versus the US Dollar at 1.4111. Where next for the GBP/EUR, GBP/USD exchange rates today?
After today's key EUR-focused event, the British pound to euro saw a minor move higher. The advance remained brief, with the GBP/EUR exchange rate returning to trade 0.3 per cent lower than the day's open.
The recent European Central Bank (ECB) minutes have shown that not only are ECB officials concerned with ‘losing face’ to economists on their decisions, but also that members believe monetary policy to be a limited tool.
This euro weakness has resulted in one of the few Sterling gains of the day, where it has otherwise fallen.
The UK government’s decision to fund a pro-Remain leaflet campaign with millions of Pounds of taxpayers’ money has caused some considerable backlash on Thursday morning.
As a result, with limited UK data on the slate for the day, the pound vs euro exchange rate trended lower on this latest piece of Brexit turmoil.
With fears of a Brexit still high on the national agenda, the British Pound’s losses against the euro and the US dollar have been simple to explain today.
The most recent piece of UK Referendum polling, a YouGov survey, has put only a single point between the ‘In’ and ‘Out’ campaign voters.
Latest Pound/Euro Exchange Rates
On Saturday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.856
The pound conversion rate (against euro) is quoted at 1.168 EUR/GBP.
Today finds the pound to us dollar spot exchange rate priced at 1.249.
The pound conversion rate (against australian dollar) is quoted at 1.911 AUD/GBP.
The GBP to NZD exchange rate converts at 2.103 today.
Please note: the FX rates above, updated 27th Apr 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.
Worries over the potentially fraught future of the UK steel industry have also been adding pressure to Pound Sterling (GBP) on Wednesday.
There are concerns that the UK government could have just weeks to secure a buyer for Tata Steel’s British steel operations rather than months, a prospect which has given investors cause for concern.
Despite registering positive British services growth, the British Pound softened versus a number of its major peers.
Sectoral growth in the UK remains significantly unbalanced, weighing heavily on investor sentiment and Pound Sterling exchange rates.
Damp market sentiment did see the Pound advance versus many commodity-driven currencies, however.
Pound Sterling (GBP) Exchange Rates Mixed on Market Sentiment, Political Uncertainty
There was some positive news against the commodity-driven currencies, as the Pound rallied above 1.88 against the Australian Dollar following the RBA announcement, which saw policy makers hold interest rates at 2% this month. The very recent decline on commodities, led by a 2% drop in crude oil prices, will create tension of another slump similar to what was experienced during the first quarter and that in turn leads to further market volatility.
However, the immediate focus is the Pound and the obvious threats surrounding the possibility of a UK exit from the European Union, which has become somewhat of a market obsession over the past couple of months.
The uncertainty surrounding the result of the referendum is only set to increase, hurting the Pound and the outlook for the UK economy this quarter.
The PMI monthly surveys for March have indicated that growth slowed to 0.4% during the first quarter, from 0.6% in the final three months of 2016 and even that is being supported by the services sector. The PMI for services industries showed that the index rose from a three year low in March, although remaining below its long-run average.
Cooling British Business Confidence Suggests Services Growth Can Not be Sustained
Business confidence is at a real low ebb and it therefore seems unlikely that the improvement in services growth during March will be sustainable.
Given the UK’s over-reliance on services growth and particularly consumer spending to drive growth in the economy, a drop in the sector will prompt concerns over an economic downturn that could lead to a cut in UK interest rates.
The report emphasizes how the referendum is looming over the outlook for the UK and the BoE financial stability officials said last week that the uncertainty could lead to further depreciation of the Pound.
Data Released 6th April 2016
U.S 18:00 FOMC Minutes from March 15th – 16th Meeting Published