ALERT: Pound euro exchange rate (GBP/EUR) in Strong Bounce; seen 0.44 pct higher

At 10:30 GBPEUR is seen 0.44 pct up on last night's closing rate at 1.1725.

The EURGBP is thus at 0.8529.

PS: The above are spot market quotes; your bank will affix a discretionary spread to the figures when passing on a retail FX rate. However, an independent FX provider will guarantee to undercut your bank's offer, thereby delivering up to 5% more FX. Please find out more here.

It appears that broad-based euro weakness is behind the morning move higher by the sterling to euro rate; EUR/USD is seen 0.47 pct lower and this is likely where the majority of action will be.

"EUR/USD drops after disappointing EUR - CPI Flash Estimate & Unemployment rate figures," says a note from Spreadco alluding to this morning's data release which caught traders off guard.

As noted in this weeks coverage, the euro has been increasingly viewed as being overvalued; and this could well be the trigger needed to deflate the shared currency.

Eurozone inflation has fallen drastically it has been revealed - year-on-year inflation for October came in at 0.7%, well below expectations for 1.1%.

This is good news for consumers but bad news for the Euro bulls as this will allow the ECB to get more accommodative in their monetary policy without risking boosting inflation.

What will surely prompt action at the ECB will be today's other important news snippet - the Eurozone unemployment rate rose to 12.2% in September, analysts had expected it to drop from a previous 12.2% to 12%.

So - some genuinely eye-opening data from the Eurozone today.

Currency markets had not expected this decidedly Euro-negative news, Sash Nugent at Caxton FX had expected the pound to euro exchange rate to remain rangebound:

"Trading has remained range-bound for a few sessions now, and although the GBPEUR rate has edged back towards 1.17, we are unlikely to see huge movements in this pairing today.

Indeed, Nugent had predicted the data to be pro-Euro!

"Eurozone data today should boost the euro a little, however any upside surprise in figures could spark another round of euro buying."

We believe that this data could be something of a game changer for the pound euro exchange rate which could allow a strong recovery to shape up.

If tomorrow's Manufacturing PMI data can deliver a positive outcome then we should surely see more gains.