Euro to British Pound Sterling: EUR/GBP Consolidates But the Longer Outlook Continues to Favour Sterling
- Written by: Gary Howes
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The euro sterling exchange rate (EUR/GBP) is currently enjoying a period of stability after a period of weakness. The outlook for the EUR/GBP does however remain compromised by the view that sterling is likely to grow in strength in 2014.
Today's Euro Exchange Rates
The euro to pound sterling exchange rate is 0.27 pct higher at 0.833. The pound to euro exchange rate is therefore at 1.2000.
Note: Our EUR quotes are taken from the wholesale spot markets. Your bank will charge a spread at their discretion when passing on a retail rate. However, an independent FX provider is so well placed on the market that they are able to deliver you up to 5% more currency. Please learn more here.
The euro pound sterling exchange rate over the past 24 hours
The Euro firmed against the Pound following the release of the disappointing UK house price data overnight which has combined with an all-round easing back in the GBP rally to send the EUR/GBP higher.
The single currency received some support from data released in Germany which showed that the Eurozone’s largest economy saw its rate of inflation pick up in December, reducing speculation that the European Central Bank would have to implement measures to stave off deflation in the region.
The only data of note due for the euro sterling exchange rate is the release of Eurozone Inflation. At 10AM London time the figures showed that inflation is where it was expected to be, thus no impact on EUR/GBP was felt.
Outlook for euro sterling exchange rate
The pound sterling (GBP) is currently enjoying a strong period of demand as highlighted by today's note from Nomura:
"We expect BoE hikes by August, and this is still not fully priced. The key variable is the unemployment rate, which is expected to hit the 7% threshold in Q1 and firmly breach by Q2. There are strong inflows into UK equity, overwhelming the negative impact from outflows."
ICN Financial say: "The pair rebounded to the upside after testing 0.8290 areas to keep the upside move expected valid over intraday basis, targeting mainly 0.8400. A breach of the aforementioned target will extend gains toward 0.8465 then 0.8500 while on the other end a break below 0.8290 will push the pair to test the main support at 0.8220."
"EUR/GBP is bid above 0.83000 today. The MACD will remain in the bullish zone for a close above 0.8260. On the upside, we see solid offers pre-0.8400," says Ipek Ozkardeskaya at Swissquote Bank.
Analyst Piet Lammens at KBC Markets says:
"We have a sterling positive bias longer term as the BoE will probably tighten policy sooner than the ECB. Short-term, we favour some consolidation as quite some good news is already discounted at current levels, especially as some UK eco data were slightly less buoyant of late.
"Next support beyond EUR/GBP 0.8252/31 stands at 0.8225 (Break-up) and at 0.8161 (76 % retracement from 0.8815). We keep a sell-on-upticks approach. The 0.8405 reaction high should provide strong resistance medium term."