GBP to EUR: Sterling Maintains area around 1.2150 area vs Euro, foreign exchange markets in tight ranges
- Written by: Gary Howes
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The pound to euro exchange rate is maintaining ground in the mid-150's as global FX markets remain in the doldrums.
The above-expected reading for GfK German Consumer Climate resulted in some slight strengthening in the euro, however momentum is limited especially ahead of the all-important inflation reading on Friday.
The pound to euro exchange rate is trading 0.1 pct higher on a day-to-day basis having reached 1.2150.
The UK GDP release has kept the pound on the front foot and GBP to EUR levels remain above 1.21. It looks like more range bound trading ahead for GBP/EUR.
(Note: All GBP and EUR quotes in this article are taken from the wholesale interbank FX markets. Your bank will affix a discretionary spread when passing on a retail offer. However, an independent FX provider will guarantee to undercut your bank's spread, thus delivering up to 5% more currency. Find out more here.)
Looking ahead, analysts at KBC Markets indicate they continue to favour the GBP over the EUR, "regarding, EUR/GBP we continue keeping a close eye on the ECB comments and on the EMU February CPI, scheduled for release on Friday. We maintain a sell-on-upticks approach for EUR/GBP in case of return action towards the 0.8350 resistance."
GBP maintains a firm tone
GBP continued to trade with a firm tone yesterday.
Comments from MPC's McCafferty yesterday were broadly neutral. While he did indicate that a further rise in sterling would be a worry for the Bank of England, he viewed that at current levels it was not a major problem for exporters.
Headlines from MPC member Ben Broadbent's this morning will likely attract some interest, however its unlikely to deviate much from his article in the Sunday press and from those delivered by various MPC members over the past few days, with him likely to conclude that any rises in interest rates will be 'limited' and 'gradual'.
Euro continue to trade a tight range
As mentioned conditions are tight on the global foreign exchange markets.
We see little on the calendar today that could potentially trigger a break out of this range.
"We think the markets may prefer to stay on the sidelines ahead of key inflation numbers due out over the next two days. Germany CPI ‘flash’ estimate for February will be released tomorrow ahead of the aggregate Eurozone print on Friday. These will be key in determining EUR sentiment and market expectations ahead of next week's ECB meeting," say Lloyds Bank Research.
