Best Pound Euro Exchange Rate In 16 Months As GBP / EUR Rallies Today On Growth Forecast & Bonds Fall

Published: May 12, 2014 at 14:00

Updated: May 12, 2014 at 21:06

The Pound to Euro exchange rate has rallied to its best level in more than 16 months today touching a high of 1.2277 GBP/EUR as momentum surrounding the British Pound Sterling's upside picks up pace.

The breakout from below 1.22 GBP/EUR came as the Federation for British industry predicted stronger growth in the coming months, this caused UK Bonds to fall and the two year yield to rise to the highest since July 2011.

The current Pound Euro exchange rate is trading up +0.07% at 1.22608 GBP/EUR. The Euro Pound exchange rate is trading at 0.81561 EUR/GBP. Rates valid at 21:00 GMT 12/05/2014

The UK two year yield climbed three basis points to 0.80 percent with the 10 year yield rising five basis points to 2.74 percent. Following on from last week the CBI also increased its growth forecast for the UK to 3% from 2.6 percent previously. The OECD and the National Institute of Economic and Social research raised their 2014 predictions which caused the market to close above its 16 month high on Friday. Following the Friday afternoon rally markets saw an increase in buying positions with the Pound Sterling to Euro exchange rate now standing at the highest level this year.

With the recent positive fundamental data coming out of the UK it’s only a matter of time before the Bank of England increases its bench mark rate, with many analysts predicting a 25 basis point rise by June. If we see a rate hike then the market will react and Sterling could push to new highs. The Pound has seen an increase in value of 0.2% this month alone and stands as the best performing currency out of the 10 developed nation currencies tracked by Bloomberg. The Euro on the other hand has weakened by 0.8% and the US Dollar has gained 0.1% this month so far.

Relevant Pound / Euro Exchange Rates Today (21:00 GMT 12/05/2014)

- The Pound Euro exchange rate is trading up +0.07% at 1.22608 GBP/EUR.

- The Euro Pound exchange rate is trading down -0.07% at 0.81561 EUR/GBP.

For more exchange rate forecasts or to compare exchange rates for a Pound to Euro international money transfer, please refer to main Exchange Rates UK website.

Last updated 21:00 GMT.